Bitcoin Price Forecast: Bear Flag Confirmed as Sellers Dump BTC – $36K Next?

Bitcoin (BTC) is having its worst day since the October flash crash, printing a daily 6.5% loss during today’s session and hitting a key support at $83,500 from which it has bounced a couple of times.

A tsunami of liquidations is contributing to this sharp drop, with over $900 million being wiped out of the market. Over 80% of this figure occurred in the past 12 hours, after Microsoft (MSFT) reported massive AI spending and underwhelming reports from its cloud unit.

Total Crypto Liquidations – Source: CoinGlass

Although not directly related to BTC, tech stocks and cryptocurrencies tend to be heavily correlated. Hence, MSFT’s 12% drop could have triggered a risk-off move across multiple markets.

The market seems to be worried that Microsoft’s cloud unit is heavily dependent on billings to OpenAI, a company that recently pivoted from a for-profit venture to a public-interest institution.

Not a Flash Crash – But Still Bad

BTC’s volume spiked by 40% to 60 billion, currently accounting for 4% of the token’s market cap. Meanwhile, top altcoins like Ethereum (ETH), Solana (SOL), and XRP (XRP) are experiencing much worse losses, ranging from 7% to 8%.

It is a bloodbath today. The question is: can it get worse?

The magnitude of today’s liquidations can’t be compared to the October 10 flash crash. Back then, we saw over $16 billion worth of leveraged longs imploding almost instantly.

Right now, open interest (OI) is much lower, and prices have declined significantly, too. Hence, today’s sharp drop qualifies as yet another risk-off move in what can already be considered a bear market.

Bitcoin is Down 33% for ATHs

Bitcoin is already down 33% from its all-time high. So, let’s face it, this is a bear market already.

BTC/USD Daily Chart (Bitstamp) – Source: TradingView

In a recent BTC price prediction, we highlighted that the token had formed a bear flag pattern in the daily chart that favored a move to the $84,000 support area. Guess what? We nailed that one.

Can it get worse? The answer, sadly, is yes.

If BTC loses the $84,000 support, then we would be looking at a much higher downside risk, as the token could rapidly drop to $74,000 for a 12% loss.

As mentioned back then, we expected some sort of consolidation between $87,000 and $90,000. Sellers showed up to dump BTC after hitting $90K multiple times, reflecting the market’s reluctance to push the token above that psychological threshold.

Buyers are nowhere to be found right now.

Big Downside Risk for BTC After Confirmed Weekly EMA Breakout

This continues to be the baseline scenario we set forth on our Bitcoin price prediction for 2026. It is the result of a bearish breakout below the 50-week EMA and could anticipate a much deeper correction to $36,000 in the long term if historical patterns repeat.

BTC/USD Weekly Chart (Kraken) – Source: TradingView

This is exactly how things played out in 2021, back when BTC dropped from $41,000 to $16,000.

History doesn’t always repeat, but it sure rhymes. The Relative Strength Index (RSI) is neck-deep into bearish territory in this higher time frame, but still has room to move further downward before hitting oversold territory.

A crypto winter seems to be coming, but there’s still time to prepare for it. Some long-dated put options for BTC-heavy portfolios could cushion the drop if the downtrend continues.