Will Bitcoin Price Really Crash To $40,000 Next? Top Analyst Weighs

Bitcoin (BTC) is declining ahead of this week’s key interest rate decisions in the United States and Japan. Its price is down 5% from its local high of around $60,650 and was wobbling between gains and losses as of Sep. 17.

Will Bitcoin Drop More?

Zoran Kole, the founder of Giga Chad Ventures and the Telegram group Crypto Insiders, anticipates Bitcoin price to decline to around $40,000 in the coming months, citing a classic bearish continuation pattern dubbed the “head and shoulders.”

Notably, the head and shoulder pattern, or H&S, develops when the price forms three consecutive peaks. The middle peak, called the “head,” is taller than the other two peaks, the right shoulder and the left shoulder. These three peaks have the same support level, called the “neckline.”

An H&S pattern typically resolves when the asset’s price closes decisively below the neckline, i.e., a decline accompanying a rise in trading volumes. As a rule, the pattern’s downside target is measured by adding the distance between the head’s top and neckline to the breakout point.

Kole applied the same technical rule on the BTC/USD charts, evaluating that the pair may decline below $40,000 if the H&S pattern plays out as intended.

“This coincides with a yearly open retest with a strong case for a bounce right below the current yearly low of $38,500, which also happens to be Saylor’s average entry on Microstrategy’s Bitcoin holdings,”

reminded Kole.

Fed Rate Cut is Next, But Japan is Spoiling Bitcoin’s Bullish Scenario

Federal Reserve officials are expected to cut the benchmark interest rate by at least 0.25% at the end of their two-day meeting on Wednesday.

The dovish expectation arises from recent Consumer Price Index (CPI) data indicating controlled inflation and signs of a weakening labor market (Source: CME). While lower rates generally boost riskier assets like Bitcoin, traders remain cautious ahead of the Fed’s decision.

Adding to the uncertainty is the Bank of Japan’s upcoming meeting on Sept. 20, where a potential rate hike could affect the “yen carry trade.” This strategy involves borrowing yen at low rates to invest in higher-yielding assets.

A Bank of Japan rate increase would raise borrowing costs, possibly triggering selling pressure on riskier assets like Bitcoin, similar to events in early August.

Bitcoin Bull Flag Raises Upside Boom Hopes

Bitcoin’s ongoing price decline appears to be part of a prevailing descending channel trend that resembles a “bull flag.”

Bull Flags form when the price declines inside a descending, parallel channel following a major rally. It represents a brief pause in the uptrend as sellers and buyers reconfigure their bias, leading to price consolidation.

The bull flag pattern typically resolves in a breakout, wherein the price closes decisively above the upper trendline and rises by as much as the height of the previous uptrend.

Applying the same principle on BTC/USD’s weekly chart brings its bull flag target to around $77,400.