Bitcoin's Key Moving Averages Suggest a Potential Drop to $38,000

As 2025 draws to a close, Bitcoin (BTC) finds itself in a challenging position, trading more than 30% below its all-time high and facing the formation of a death cross. This technical indicator has historically signaled notable price corrections. Currently, Bitcoin is hovering just above $89,200, having witnessed its 10-week and 50-week simple moving averages (SMAs) intersect on December 8. This significant development was highlighted by market analyst Ali Martinez on the social platform X (formerly known as Twitter).

Key Takeaways

Bitcoin is currently trading around $89,200 and has formed a death cross between its 10-week and 50-week SMAs.
Historical data indicates that previous death cross formations have resulted in corrections ranging from 50% to 67%.
Market expert Mags has outlined two possible scenarios for Bitcoin's future, one bullish and the other bearish, which hinge on the behavior of Tether's USDT dominance.

Bitcoin

Bitcoin May Experience a 50%-60% Correction

Martinez highlighted the necessity of monitoring the movements of these two moving averages on the weekly chart. Historically, whenever Bitcoin has experienced a death cross between the 10-week and 50-week SMAs, it has been followed by significant price drops.

As illustrated in the cryptocurrency’s weekly chart below, past instances of such crossovers led to declines of 67% in September 2014, 54% in June 2018, 53% in March 2020, and 64% in January 2022.

Bitcoin

With the recent death cross, Martinez suggests that, if historical trends hold, Bitcoin could face corrections in the range of 50% to 60%. This would place Bitcoin's price somewhere between $50,000 and $38,000.

Potential Scenarios for Bitcoin's Future

Since reaching highs above $126,000 in October, Bitcoin has been trading around the $85,000 mark for several weeks. This period coincides with Tether's USDT dominance breaking out of its previous range, with current levels remaining above the breakout zone.

Given the inverse relationship between Bitcoin and USDT dominance, expert Mags has identified two primary scenarios for Bitcoin's trajectory.

Bullish Scenario: If USDT dominance starts to decrease, the present breakout could be a false signal. In this case, Bitcoin might see a resurgence in price, potentially challenging its previous all-time high before significant distribution occurs.
Bearish Scenario: Conversely, if the broader market trend shows signs of weakening, Bitcoin may witness a short-lived bounce. Meanwhile, USDT dominance could form a higher low near its mid-range before beginning to increase again. In this scenario, Bitcoin would experience a slow distribution pattern, indicating neither a crash nor a steep decline but rather a gradual and choppy downward move typical of initial bearish market behavior.

The upcoming trend in USDT dominance is crucial, as it will help determine whether the current market is merely a pause before further price changes or the beginning of an extended distribution phase leading up to a new all-time high.

Bitcoin

Featured image from DALL-E, chart from TradingView.com