The recent panic selling in Bitcoin and the broader crypto market has been influenced by the Bank of Japan’s decision to raise interest rates from 0% to 0.25%, coupled with increasing fears of a U.S. recession. This has led Bitcoin’s (BTC) price to fall to $49,112 but has since recovered slightly to $52,982, showing a nearly 16% drop. 

Meanwhile, leading on-chain data and analytics provider CryptoQuant is warning that Bitcoin could fall further, possibly down to $40,000.

Bitcoin (BTC) Price To Drop Below $40K

Bitcoin (BTC) has experienced a dramatic fall, dropping over 16% in the last 24 hours and breaking below the crucial $57,000 support level. This sudden decline has raised alarms in the crypto community, with experts now predicting a potential drop to $40,000.

According to leading on-chain data and analytics provider CryptoQuant, this breach of support signals a troubling trend. The recent drop has pushed traders into their most negative unrealized profit margins since November 2022. 

Perhaps, CryptoQuant’s data highlights that this recent price action could lead to further declines, making it a critical period for Bitcoin holders and traders alike.

The recent crash in the crypto market caused over $1.06 billion to be wiped out in the last 24 hours as per a coinglass report. Of this, $900 million was lost by investors who thought prices would rise, and $160 million was lost by those who expected prices to fall.

Bitcoin’s Key Support Level

Echoing a similar bearish stance popular crypto chart analyst Ali Martinez highlights a crucial support level for Bitcoin around $47,140. This level is important because nearly 900,000 addresses purchased a total of 489,000 BTC at this price. 

This concentration of holdings makes $47,140 a key support area where many investors have significant positions. If Bitcoin manages to stay above this level, it could indicate resilience and possibly set the stage for a price rebound. 

However, a break below this support could signal further declines, as it might lead to increased selling pressure from those who bought at this level.

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