Bitcoin's Alarming Downtrend... Rumors of a $10,000 Crash Resurface

▲ Bitcoin (BTC), investor, plunge/AI-generated image ©

As Bitcoin (BTC) experiences a severe downturn and investor sentiment cools rapidly, pessimistic forecasts suggesting a سقوط to $10,000 are emerging, while warning signs such as long-term investors cutting losses and stablecoin outflows are appearing across the market.

According to investment outlet FXStreet on February 18 (local time), the total cryptocurrency market capitalization has been moving sideways around $2.34 trillion, showing a loss of momentum. While stock markets such as the Nasdaq and Dow Jones have found support at their 200-day and 50-day moving averages and regained strength on bargain hunting, the crypto market remains deeply sluggish, trading 17% and 31% below its 50-day and 200-day moving averages, respectively. Analysts suggest this could mean cryptocurrencies are no longer functioning as a risk-on indicator or may be signaling a larger impending disaster.

Investor sentiment is also deteriorating to extreme levels. The crypto sentiment index fell to 8 on Wednesday, indicating extreme fear. The market has remained in single digits for nine of the past 14 days, reflecting deeper pessimism than during the 2020 pandemic or the 2022 Terra (LUNA) collapse. Bitcoin fell to $66,700 at the close of U.S. trading before rebounding slightly, but downward pressure continues amid the recent strength of the U.S. dollar.

Glassnode reported that as Bitcoin declined to $60,000, long-term holders are facing psychological pressure comparable to that experienced during the Terra (LUNA) crash in May 2022. Their willingness to realize significant losses and begin selling assets is considered a typical sign of the late stage of a bear market. Additionally, analyst Darkfost noted that Binance has recorded net stablecoin outflows for three consecutive months, suggesting a deepening liquidity crunch across the broader market.

Major financial institutions and experts are also revising down their price targets. Standard Chartered lowered its Bitcoin target from $150,000 to $100,000, citing market volatility. It also reduced targets for Ethereum (ETH) from $7,000 to $4,000, Solana (SOL) from $250 to $135, and XRP (Ripple) from $8 to $2.80. Mike McGlone of Bloomberg Intelligence warned that Bitcoin could plunge to $10,000 this year, potentially signaling a U.S. recession and a stock market collapse.

Meanwhile, Polygon (MATIC) showed a positive sign by surpassing Ethereum for the first time in daily transaction fee revenue, driven by activity on Polymarket. According to research from BVNK, stablecoins are increasingly being used for payments, payroll, and savings, thanks to average fees that are about 40% lower than traditional payment services.

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