Amid Trump Risks and Major Bithumb Incident, Is Bitcoin’s $40,000 Warning Becoming Reality?

▲ Bitcoin (BTC)

Investor sentiment toward Bitcoin (BTC) has plunged to a record low of 5, while the cryptocurrency market has fallen into extreme turmoil amid a mistaken large-scale transfer incident at Bithumb and mounting political uncertainty.

Guy Turner and Nic Puckrin, co-hosts of the cryptocurrency-focused YouTube channel Coin Bureau, said during a live broadcast on Feb. 16 (local time) that Bitcoin’s Fear and Greed Index had fallen to an all-time low of 5. Turner noted that the market has effectively frozen, with the fear index approaching zero, and that skepticism is spreading among investors as Bitcoin has given back all gains made since the inauguration of the Donald Trump administration. Expectations that followed President Trump’s election have largely faded, leaving political uncertainty as the dominant sentiment.

Puckrin pointed out that the large-scale mistaken transfer at Bithumb starkly revealed the vulnerabilities of the cryptocurrency market. “An exchange employee mistakenly distributed 2,000 BTC instead of a prize worth 2,000 won, triggering a 17% flash crash in Bithumb’s internal price,” he explained. He added that the incident significantly damaged market confidence, leading to on-site inspections by regulatory authorities.

Strategy’s recent moves have also drawn attention. The company recently purchased an additional $90 million worth of Bitcoin, signaling its commitment to continued accumulation. However, it is reportedly sitting on unrealized losses totaling $5 billion. Meanwhile, a White House-led meeting on U.S. cryptocurrency market structure legislation has encountered difficulties, as disagreements with the banking sector over stablecoin yield payments remain unresolved.

From a technical analysis perspective, the possibility of a massive head-and-shoulders pattern forming on Bitcoin’s weekly chart has been raised. Turner warned that, considering historical drawdowns, Bitcoin’s price could fall further to around $44,000. The 200-week exponential moving average (EMA), currently near the $60,000 level, is acting as a key support line, and a breakdown below this level could signal the onset of a prolonged bearish phase.

The upcoming release of the Federal Open Market Committee (FOMC) meeting minutes and the Personal Consumption Expenditures (PCE) inflation data this week are expected to serve as critical inflection points for the market. As macroeconomic data dampens expectations of interest rate cuts and pushes Bitcoin below the $66,000 level, investors are urged to exercise caution. The market is closely watching for greater regulatory clarity and shifts in the macro environment, while monitoring whether Bitcoin can break through resistance near $68,000 and establish a solid support base.

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