Bitcoin Could Extend Selloff Into the $40,000s, Bitfinex Says
Bitfinex analysts say Bitcoin (BTC) may not have bottomed yet. In its Bitfinex Alpha report, the exchange links further weakness to ongoing spot-market exits by investors.
The report expects BTC could fall into the $40,000s by year-end, based on historical drawdown behavior and the typical time window between cycle tops and bottoms. Bitfinex highlights that in past bears BTC bottomed after dropping at least ~70% from all-time highs (ATHs). BTC is currently about 53.9% below its ATH of $126,000. A move into the $40,000s would imply a decline of at least ~68% from the peak.
Timing is also a key point: analysts estimate a potential bear-cycle bottom in Q4 2026, assuming cycle moves relative to moving averages.
On structure, the article notes BTC remains under the True Market Mean of ~$77,000, a level viewed as a regime divider between bullish and bearish conditions. Even though BTC’s “floor” gave way over the weekend, structural levels are said to be unchanged.
Near-term support is framed around $61,500 (broken) and the next key level around $53,400, after a recent low near $58,136. Bitfinex points to weaker spot demand signals—short-term holder selling, ETF outflows, and negative gamma pressure—while also noting there were no large-scale liquidations or open-interest flushes below $60,000. This is interpreted as a structural spot-market exodus.
Traders are therefore likely to watch for a renewed resurgence in spot demand to stabilize price and form a potential floor.
Bearish
This news is bearish for traders because it frames Bitcoin’s current weakness as likely continuing rather than bottoming. Bitfinex’s analysis ties a potential move into the $40,000s to (1) historical drawdown depth from cycle ATHs and (2) a bearish spot-market exodus, supported by ETF outflows and weaker spot demand signals.
Key near-term levels (break of ~$61,500 and focus on ~$53,400) suggest downside risk remains, especially since price is still below the True Market Mean (~$77,000), which the report uses to define regime conditions. The lack of large liquidation cascades implies the selloff may be more “structural” and slower to reverse, similar to prior bear phases where rebounds were limited until spot demand returned.
Short term: traders may expect continued pressure if spot inflows do not recover, and may trade bounces more cautiously.
Long term: if the timing estimate (Q4 2026) and historical drawdown framework hold, the market may be approaching a later-cycle stabilization window. However, the report makes the floor conditional on a resurgence of spot demand, so until that catalyst appears, rallies could face selling resistance.