Bitcoin Price Analysis: Potential for a 50% Drop

Bitcoin Price Analysis: Potential for a 50% Drop

Summary:
This article explores the recent bearish trends in Bitcoin's price, with significant indicators suggesting further declines may be imminent.

Key Takeaways:

Bitcoin's monthly MACD indicates the possibility of continued downward pressure.
MVRV bands reveal that Bitcoin could still fall to crucial mean-reversion levels.

Bearish Signals Emerge for Bitcoin

Bitcoin sellers are increasingly vocal as new bearish signs have surfaced this week.

Monthly MACD Turns Bearish for the First Time This Cycle

In October, Bitcoin's Monthly Moving Average Convergence Divergence (MACD) transitioned into bearish territory for the initial time in this bull market phase.

Historically, since 2014, the MACD has flipped to red on five occasions. According to trader Brett, in four of those instances, Bitcoin experienced roughly 50% downturns before finding a support level.

BTC/USD Monthly Chart. Source: TradingView/Brett

Only once, in 2019, did this indicator align closely with the market bottom, yet even then, the price kept falling for an additional two months following the crossover.

Since the October MACD crossover, Bitcoin has seen a decline of about 35%. The analysis suggests a potential for an extra 25% drop by January 2026, targeting Bitcoin's next critical support around $62,200. This target aligns with the historical 200-week exponential moving average (EMA) support seen in prior bearish markets at roughly $66,300.

BTC/USDT Weekly Chart. Source: TradingView

Potential for Bitcoin to Fall Below $50,000: Insights from Peter Brandt

Similar risk levels can be observed on long-term trend charts from veteran trader Peter Brandt.

BTC/USD Weekly Chart. Source: TradingView

His forecasts suggest that Bitcoin might slide towards the upper boundaries of its rising support channel, situated in the sub-$70,000 range. Trader Crypto Patel has expressed similar views using Fibonacci retracement levels, as illustrated below.

BTC/USD Daily Chart. Source: TradingView/Crypto Patel

If selling pressure increases, Brandt has predicted deeper downside targets potentially reaching the mid-$40,000s, indicating a 50% drop from current prices. Analyst Tracer identified a double top fractal structure that hints at a similar outcome.

MVRV Bands Support Bearish Sentiment

On-chain valuation metrics further support the bearish technical analysis.

Bitcoin's Market Value to Realized Value (MVRV) extreme deviation bands show that BTC is still trading significantly above its −0.5σ band, a level historically noted as a gravity zone during corrective trends.

Bitcoin MVRV Extreme Deviation Pricing Bands. Source: Glassnode

In previous bear markets in 2018, 2019, and 2022, Bitcoin frequently retreated to this −0.5σ area before establishing more stable bottom levels, according to Glassnode data.

A similar price move now could see Bitcoin decreasing to $76,250, closely aligning with targets set by Brandt and Patel.

Related: ‘Inevitable’ $50K BTC Price Crash: 5 Things to Know in Bitcoin This Week