The Ideal Moment to Consider Shorting Bitcoin to $40,000

In a recent tweet, crypto analyst Stockmoney Lizards pointed out that the current state of Bitcoin presents “the perfect opportunity” for market bears to short the cryptocurrency down to $40,000. He backed his claim with a chart illustrating Bitcoin falling below a significant resistance level after its drop from over $100,000, which appears to create a continuation pattern for traders anticipating further declines.

Key Takeaways

Analyst Stockmoney Lizards suggests a potential short opportunity for Bitcoin down to $40,000 due to current market conditions.
His analysis parallels a similar structure seen in 2022 that led to a significant price drop.
Despite the bearish outlook, he clarifies he doesn’t foresee a deep bear market, predicting potential consolidation instead.
The weekly EMA50 is critical for Bitcoin’s next bullish movement, with expectations for upward momentum into early 2025.

Bitcoin dramatic drop

Yet, the analysis in his post suggests a deeper understanding of what may happen next with Bitcoin, despite showing a similar bearish pattern to that of 2022.

Bears See Their Moment

The chart shared by Stockmoney Lizards indicates that Bitcoin's recent breakdown mirrors the pattern from 2022, where the price rejected a crucial resistance level leading to a significant decline towards an accumulation zone. Currently, Bitcoin experiences a similar rejection just above the $100,000 mark, followed by a descent below the weekly EMA50. This decline places Bitcoin within a range reminiscent of previous accumulation phases.

By overlaying the recent price action on past trends, it appears that a downturn to $40,000 may be on the horizon in the next weeks or months. Bitcoin is currently priced at $90,240, and such a drop would mean losing approximately 55% of its value, effectively undoing two years of gains.

Bitcoin price 1

Bitcoin Price Chart. Source: @StockmoneyL On X

Clarifying the Analyst’s Intent

After the post gained popularity, Stockmoney Lizards explained that his message had been misunderstood. His suggestion for traders to short down to $40,000 was an exaggerated statement, and he does not anticipate a dramatic downturn in the market.

He elaborated that he envisions Bitcoin may consolidate and possibly touch local lows, but he does not expect a prolonged slump. According to him, the worst-case scenario could see Bitcoin touch the weekly EMA200, which does not typically mark the end of bull markets. His real midterm outlook points toward an upward trend for Bitcoin's price.

Before posting the bearish prediction, Stockmoney Lizards shared another analysis which described Bitcoin nearing a pivotal moment at the weekly EMA50 indicator.

Bitcoin price 2

Bitcoin Price Chart. Source: @StockmoneyL On X

This earlier chart clarified his actual perspective, predicting that Bitcoin is on the verge of a significant technical pivot and forecasting upward movement as we approach the end of December and into the first quarter of 2025. Hence, reclaiming the weekly EMA50 is essential for Bitcoin to initiate its next bullish phase.

Bitcoin price chart from Tradingview.com BTC price falls to $90,000 | Source: BTCUSD on Tradingview.com