Since the general stock market crash caused by the downturn in the Japanese stock market, Bitcointhe largest cryptocurrency, has been experiencing significant price fluctuations continuously, fueling speculation of a massive price drop as several key indicators turned negative, suggesting a possible sustained decline.

Bitcoin Could See Bearish Move Towards $40,000

As Bitcoin continues to show bearish momentum, Grizzly, a technical and on-chain analyst who has been tracking Bitcoin’s recent price action, issued a cautionary prediction, stating that BTC could drop further to around $40,000. The market expert’s dire prediction for the crypto asset is based on the crucial NUPL (Net Unrealized Profit/Loss) metric.

It is worth noting that the NUPL metric is a tool to help determine the distinction between relative unrealized profit and relative unrealized loss. Simply put, the tool here illustrates the mood of investors and what Bitcoin Owners those who want to sell their assets make a profit or a loss.

When NUPL is high, it means that a significant portion of the market is benefiting, which can lead to pressure to sell or buy shares. gainOn the other hand, when NUPL is low, it means that the majority of market participants are losing money, which encourages additional purchasing power or a bullish mood.

According to the analyst, the current values ​​of the NUPL metric are in a range that typically marks the beginning of a price drop for Bitcoin, as the value is currently close to a critical level of 0.4, indicating a likely downtrend.

The 0.4 level is historically a key support and resistance level, and data suggests that a break below this level often signals the start of a major bearish trend. Should the index continue its downward trend, Grizzly is confident that the bears can take full control of the market.

As a result, the expert expects a sharp decline for BTC to around $40,000 in the short term. While the analyst expects a price drop due to the NUPL metric, he pointed out that the magnitude of the current downturn is not yet strong enough to definitively signal the end of the uptrend.

BTC experiences a slight revival

Given the volatile nature of Bitcoin, Grizzly’s analysis serves as a warning to crypto investors about potential price instability for the crypto asset in the near future.

Currently, the digital asset is showing healthy movement, after a slight decline recovery at the $56,632 level. BTC may have recovered to $58,531, but the flagship coin is still down more than 3% over the past week.

Although the overall market sentiment is negative, there is still room for further gains for the asset, as daily trading volume has increased by more than 6%, indicating investor optimism.

Main image from LinkedIn, chart from Tradingview.com