Bitcoin’s trajectory appears increasingly constrained amid mounting on-chain indicators and technical analyses signaling a potential retracement toward the $40,000 mark, a level that would imply nearly a 50% decline from its recent near $76,000 range. Expert forecasts, including those from John Blank, the chief strategist at Zacks Investment Research, align on this price target emerging within the next six to eight months. Such a decline corresponds with historical bitcoin bear market cycles, which often manifest recognizable retracement patterns and bear resemblance to previous market bottoms observed in earlier phases. Notably, Bitcoin-led routs have contributed significantly to the total cryptocurrency market cap dropping from $3.3 trillion to $2.3 trillion according to CoinGecko, underscoring the scale of losses influencing price action. This persistent downward pressure is often exacerbated by market manipulation that inflates volatility and misleads investors.
Bitcoin may retrace to $40,000, marking a potential 50% decline in the coming six to eight months.
Technical justifications for this projection rest heavily on established tools like Fibonacci retracement levels, which suggest a natural pullback zone aligning near $40,000. Additionally, Bitcoin’s price movements have recently formed a megaphone chart pattern, a structure characterized by expanding volatility and a downward bias, supporting the likelihood of a test of this key level. This convergence of technical signals strengthens the view that the cryptocurrency remains in a protracted downward phase rather than stabilizing for sustained recovery. According to Zacks, the move to $40,000 would come as part of the ongoing bear market decline, highlighting a continuation rather than an abrupt reversal.
The ongoing bear market, officially beginning in November 2024, has already resulted in a substantial price fall, roughly 37-40% from the peak levels exceeding $125,000. Historical data indicates such bitcoin winters typically endure between 12 to 18 months, placing the current downturn in its earlier stages. Consequently, there remains ample room for further depreciation before an eventual bottom caps the cycle. Moreover, recent liquidations wiping out approximately $1.5 billion in crypto positions further intensify selling pressure and market fatigue as reflected by market-wide liquidations.
External macroeconomic influences exacerbate this bearish outlook. Policy shifts, particularly tariff announcements from the Trump administration, have introduced additional headwinds impacting cryptocurrency valuations. The increasing integration of digital assets into traditional financial markets has heightened sensitivity to broader market shocks, with regulatory ambiguity and derivative market liquidations contributing to downward price pressure.
Although short-term rallies induced by short liquidations in the derivatives arena can temporarily push bitcoin above $90,000, these spikes often resolve in subsequent retracements. This cyclical pattern reinforces the technical consensus around a meaningful correction.
Looking beyond, analysts anticipate the bear market bottom to precede a robust bull cycle, potentially propelling Bitcoin toward new highs between $172,000 and $203,000 by 2029. Institutional participation and improving macroeconomic conditions are essential catalysts for this projected recovery. However, near-term caution remains paramount as Bitcoin navigates this complex technical and macroeconomic landscape.
