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bitcoin

Bitcoin Flashes Rare Signal That Could Trigger Drop Below $40,000, Analyst Warns

Ash Tiwari
by Ash Tiwari
1 week ago
·
Posted in Bitcoin News
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Bitcoin (BTC) recently closed its June monthly candle above $100,000, raising hopes among bulls for continued upside throughout the summer. However, the digital asset has now flashed a rare signal that warns of a significant price pullback in the coming months.

Bitcoin Flashes Rare Bearish Signal

According to a recent X post by seasoned crypto analyst Ali Martinez, Bitcoin has triggered a Tom Demark (TD) Sequential sell-signal on the quarterly chart. Martinez noted that this is a rare and historically reliable warning that has often preceded major drawdowns for the cryptocurrency.

Related Reading: Bitcoin Recovery Gains Momentum While Network Activity Remains Muted – Risk Ahead?

For the uninitiated, a quarterly TD Sequential sell-signal is a rare technical indicator that appears after multiple consecutive bullish quarterly candles, signaling long-term trend exhaustion. It suggests that Bitcoin may face a significant correction after a prolonged uptrend.

In 2015, its appearance was followed by a 75% decline in BTC, while in 2018, a similar signal preceded an 85% crash. Martinez cautioned that if the current signal plays out similarly, Bitcoin could fall as low as $40,000 – a potential 64% drop from current levels.

However, not all analysts share this bearish outlook. Fellow crypto analyst CryptoGoos interpreted Bitcoin’s quarterly close as bullish. He disputed comparisons with the 2021 double-top pattern and suggested that market structure remains strong.

goos
Crypto analyst CryptoGoos dismissed the latest quarterly close as a double-top pattern | Source: CryptoGoos on X

BTC Looking Ready For New High?

Despite the bearish TD Sequential sell-signal, several analysts remain confident that a new all-time high (ATH) is on the horizon. Analyst Jelle pointed out that BTC has broken out and successfully re-tested a 3-day bullish pennant, making it look “ripe for liftoff.”

jelle
Source: Jelle on X

In another post, Jelle noted that if BTC decisively breaks above $110,000, its next target could be $130,000. For reference, BTC’s current ATH is $111,814, recorded on May 22.

Related Reading: Bitcoin Long-Term Holders Selling, But Price Holds – New Buyers Stepping In?

Meanwhile, Merlijn The Trader highlighted a bullish technical setup on BTC’s daily chart. He pointed to a breakout from a falling wedge, followed by the formation of a bull flag – two strong continuation patterns. He stated:

Two of the strongest continuation patterns back to back. $140K is not hopium. It’s the projection. Strong hands are positioning now. Bitcoin doesn’t wait. The breakout is inevitable.

merlijn
BTC is poised to breakout from a bull flag pattern, eyeing new ATH around $140,000 | Source: Merlijn The Trader on X

Additionally, Bitcoin’s weekly RSI continues to move toward the upper trendline – a pattern that has historically coincided with BTC reaching new highs. At press time, BTC trades at $109,438, up 2.9% in the past 24 hours.

bitcoin
Bitcoin trades at $109,438 on the daily chart | Source: BTCUSDT on TradingView.com
Featured image from Unsplash.com, charts from X and TradingView.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
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Ash Tiwari

Ash Tiwari

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Ash is a seasoned freelance editor and writer with extensive experience in the blockchain and cryptocurrency industry. Over the course of his career, he has contributed to major publications, playing a key role in shaping informative, timely content related to decentralized finance (DeFi), cryptocurrency trends, and blockchain innovation. His ability to break down complex topics has allowed both seasoned professionals and newcomers to the industry to benefit from his work. Beyond these specific roles, Ash's writing expertise spans a wide array of content, including news updates, long-form analysis, and thought leadership pieces. He has helped multiple platforms maintain high editorial standards, ensuring that articles not only inform but also engage readers through clarity and in-depth research. His work reflects a deep understanding of the rapidly evolving blockchain ecosystem, making him a valuable contributor in a field where staying current is essential. In addition to his writing work, Ash has developed a strong skill set in managing content teams. He has led diverse groups of writers and researchers, overseeing the editorial process from topic selection, approval, editing, to final publication. His leadership ensured that content production was timely, accurate, and aligned with the strategic goals of the platforms he worked with. This has not only strengthened his expertise in content strategy but also honed his project management and team coordination skills. Ash's ability to combine technical expertise with editorial oversight is further bolstered by his knowledge of blockchain analysis tools such as Etherscan, Dune Analytics, and Santiment. These tools have provided him with the data necessary to create well-researched, insightful articles that offer deeper market perspectives. Whether it’s tracking the movement of digital assets or analyzing blockchain transactions, his analytical approach adds value to the content he produces, ensuring readers receive accurate and actionable information. In the realm of content creation, Ash is not limited to just cryptocurrency markets. He has demonstrated versatility in covering other emerging technologies, market trends, and digital transformation across various industries. His in-depth research, coupled with a sharp editorial eye, has made him a sought-after professional in the freelance writing community. From developing editorial calendars to managing content delivery schedules, he has honed a meticulous approach to project management that ensures timely, high-quality work delivery. Throughout his freelance career, Ash has consistently focused on improving audience engagement through well-researched, insightful, and relevant content. His ability to adapt to the evolving needs of clients, whether it's enhancing the visibility of digital platforms or producing thought-provoking pieces for a wide range of audiences, sets him apart as a dynamic force in the field of digital content creation. His contributions have helped to shape a well-rounded portfolio that showcases his versatility, technical expertise, and dedication to elevating the standards of journalism in blockchain and related sectors.

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