The Bank of Japan’s increase in interest rates from 0% to 0.25% and rising US recession fears triggered panic sales in the Bitcoin (BTC) and cryptocurrency market. As a result, Bitcoin’s price dropped to $48,800 before recovering to over the $52,000 threshold. This price change for the crypto king represents an approximate 16% drop, and according to CryptoQuant, the downward trend may continue.
Bitcoin’s Downward Trend May Continue
The largest cryptocurrency is currently trading below the critical $57,000 support with a more than 16% drop in the last 24 hours. This sudden price drop has caused concern in the crypto world, and experts now predict that Bitcoin could fall to $40,000. Leading on-chain data and analysis provider CryptoQuant warned that Bitcoin could drop further to $40,000.
According to CryptoQuant, breaking this support level could signal a worrying trend. The recent drop has left investors with the most negative unrealized profit margin since November 2022. Data shows that Bitcoin investors are at a critical juncture.
The crash in the cryptocurrency market over the last 24 hours resulted in a total liquidation of $1.06 billion. According to Coinglass data, $900 million of this loss came from investors expecting prices to rise, while $160 million came from those expecting prices to fall.
Critical Support Level for Bitcoin
Popular crypto analyst Ali Martinez identified $47,140 as a significant support level for Bitcoin. This level is where approximately 900,000 wallet addresses purchased a total of 489,000 BTC. This concentration makes $47,140 an important support area. If Bitcoin can stay above this level, it may show strength, which could signal a price recovery.
On the other hand, if the price falls below the support indicated by the analyst, it could increase selling pressure from those who bought BTC at this level. As the largest cryptocurrency approaches this support level, investors and analysts are closely monitoring whether the level will hold. How Bitcoin navigates this critical period will likely become clear, especially with the opening of US markets at 16:30.
