Bitcoin Price May Drop 20%, Bitwise Analyst Flags $48K ‘Max Pain’ Level

After posting significant losses in recent days, the Bitcoin price is finally showing positive signals with a modest 2.5% rebound in the last 7 days. 

However, there are many who believe that the current positive trend is just a temporary relief rally. Bitwise Europe Head of Research Andre Dragosch states that the Bitcoin price is preparing for further downside. He sees the possibility of a deeper BTC price correction, possibly pulling the coin to a severe low of $48,000.

Bitcoin price could hit $48K, says Bitwise analyst

In a recent interview, Bitwise’s Andre Dragosch shared a bearish scenario for the Bitcoin price. Dragosch sees the possibility of a much sharper drop in the Bitcoin market, which he calls the “max pain” scenario.

However, Dragosch projects the possibility a deeper Bitcoin price crash, which would represent a massive 20% fall from the current levels. The analyst pointed to several critical price levels supporting his claims. These include the 200-week moving average near 61,000, the realized price at $56k, and the long-term holder cost at $48k. With the help of these reference points, Dragosch stated that the BTC price could touch $48k, describing it as the max pain point.

Further, the Bitwise analyst explained that the platform’s experimental model showed positive signals last week, identifying the formation of market bottoms. But he added, on-chain data hasn’t confirmed that the BTC price has reached its cycle bottom.

A similar view was recently shared by the CryptoQuant analyst Julio Moreno, who stated that the Bitcoin price hasn’t yet reached its bottom and may soon move towards its realized price at $53,600.

Other research firms have also shared a similar outlook. For instance, Alex Thorn, Head of Research at Galaxy Digital, has also warned about a possible BTC price drop. He sees BTC’s bottom at the $40k-$46k zone.

ETF outflows behind Bitcoin’s recent fall

Moreover, Dragosch added that the recent Bitcoin price crash has been mainly driven by the significant ETF outflows. He pointed out that nearly $2 billion in assets were pulled out by investors in just one week.

Bitcoin ETF flows have been decisively negative recently. Source: Farside Investors

The Bitwise analyst also highlighted that the recent price movements were least influenced by the slowdown in public holders’ accumulation. He noted that the recent sale of 32 BTC by Strategy, the largest Bitcoin treasury company, hasn’t affected the Bitcoin price much, since the sold amount is only a small fraction of the company’s total BTC holdings.

Key resistance test at $64-$65K

Despite the current positive trend in the Bitcoin market, there are mixed opinions. While many research analysts debate over the Bitcoin price’s bottom formation, other market experts are analysing the coin’s support and resistance.

Ted, a prominent crypto analyst, took to X to share his outlook on the Bitcoin price. According to him, BTC is currently trying to break past the key resistance at $64k-$65k. But he added that buyers are struggling to push the price higher.

Thus, he identifies this as a significant hurdle for the Bitcoin price’s sustained rally. If BTC manages to surge above this level, it could soon hit $68k, he added. At the same time, if it fails to reclaim this level, it could drop to $60k.