Key Takeaways:
Bitcoin faces a potential slide into the $40,000s before finding a bottom, according to Bitfinex analysts who cite historical drawdown patterns from prior market cycles.
Bitcoin could extend its ongoing decline into the $40,000 range before bottoming, Bitfinex analysts said in a report published June 30, citing previous drawdown patterns and the typical time horizons between market tops and bottoms. The token traded at $58,826 as of 14:30 UTC, down 1.2% over the past 24 hours and on track for a 13% quarterly loss, according to CoinGecko data.
"Following previous drawdown patterns and time horizons between tops and bottoms, BTC is likely to extend its ongoing decline to the $40,000s," the Bitfinex analysts wrote. The projection aligns with warnings from other market participants, including Alex Kuptsikevich, chief market analyst at FxPro, who said a break below the current $59,000-to-$60,000 consolidation zone could open the way toward $40,000.
The current setup shares visual similarities with Bitcoin's 2024 consolidation between $55,000 and $70,000, but differs in a critical way: this one is forming below both the 50-day and 200-day moving averages, which are sloping downward. Open interest across derivatives exchanges stood at $28.6 billion as of June 30, down from $32.1 billion a week earlier, Coinglass data shows. Funding rates have turned negative across major exchanges, indicating that short positions are paying longs — a sign of bearish positioning that has historically preceded sharp reversals in both directions.
The $40,000 level represents a roughly 32% decline from current prices and would mark Bitcoin's lowest point since early 2024. The token has not traded below $50,000 since February of that year. On-chain data from CryptoQuant shows long-term holders beginning to capitulate, with spent output profit ratios declining to levels that in past cycles preceded major bottoms. Pseudonymous analyst Darkfost flagged the trend as consistent with late-stage bear market behavior, even as it signals near-term pain.
Why the $40,000 target carries weight
The Bitfinex forecast arrives as multiple pressure points converge on the market. Strategy, the largest corporate holder of bitcoin, has authorized management to sell more than $1 billion from its reserve — a departure from founder Michael Saylor's long-standing "never sell" posture. The company's common stock fell 25% in the week through June 26 to its lowest level since February 2024, while its preferred stock, STRC, hit a record low near $71.
Spot bitcoin ETF outflows have exceeded $3 billion in June, according to data from The Block, as institutional demand softened alongside a rising U.S. dollar. The DXY index climbed to 106.5 on June 30, its highest level in three months, typically a headwind for dollar-denominated assets including bitcoin. Jiang Zhuoer, founder of Chinese mining pool BTC.top, has called a bottom between $42,000 and $44,000 for late 2026 based on long-term cycle models and Strategy's mNAV nearing 2022 lows.
Not all forecasts point lower. Grok AI's model predicts a short-term bounce to $68,000 to $72,000 within 30 days, citing oversold conditions and support at the 200-week moving average. Arthur Hayes, former CEO of BitMEX, has argued that AI-driven liquidity expansion could eventually push bitcoin toward $1 million. The divergence between near-term bearish forecasts and longer-term bullish narratives reflects the uncertainty around whether the current drawdown represents a cyclical bottom or the early stages of a deeper correction.
This article is for informational purposes only and does not constitute investment advice.
