Could Bitcoin Drop below $40,000? Here’s What the Data Says

Bitcoin (BTC) could be due for a major price drop according to one metric. Currently at $58,121 (BTC/USD), there is some fear the coin could drop as low as $40,000.

While a drop of that  severity may seem far fetched, analysts are looking at investor sentiment toward Bitcoin and are seeing a lack of confidence that is alarming. Bitcoin’s recent bearish runs have made it difficult for many investors to keep their confidence in Bitcoin high. Sharp declines over the past few months have been caused by a negative US jobs report, major asset transfers by various governments and crypto exchanges, and the general market crash.

While Bitcoin managed to make some progress toward recovery recently, the coin’s longevity and stability have been severely undermined by recent events. The Net Unrealized Profit/Loss (NUPL) metric says that the coin is due for a sharp decline that could take it as low as $40,000.

What Is the NUPL?

This metric gives a measurement of investor sentiment at a glance, looking at what would be lost by those who want to sell off their assets. If this metric is high, then much of the market is making money and there is selling pressure. If the NUPL is low, though, then much of the market is losing money and a bullish trend could emerge.

The NUPL is currently high, which indicates selling pressure and a strong potential downward movement. The bears could soon take hold of Bitcoin and force it down to critical levels.

Our Bitcoin Price prediction for now is that the coin will benefit from improved economic reports, though there has been little indication that this is the case. We believe that the recent CPI report and inflation numbers point toward greater stability for the market, giving Bitcoin an opportunity to climb back toward $65,000 in the near future. With positive economic data on its side, Bitcoin could be prevented from slipping much further for the short term.