Bitcoin Flashes Major Bear Signal After Rejection: Is $40K BTC on the Horizon?

Bitcoin is showing renewed price pressure after failing to hold above key trend levels. The asset is trading near $86,000, following a sharp drop below $81,000 last week and a modest recovery.

Consequently, this move has raised questions across the market about whether a deeper correction may follow.

Price Rejected at Major Resistance

Bitcoin recently tested the 50-week Exponential Moving Average and the long-term descending trendline, both acting as resistance. It failed to stay above these levels and was pushed back down. Analyst Rekt Capital noted that the 50-week EMA and the Macro Downtrend are aligned, making this a tough zone for the price to break through.

The rejection at this confluence and the formation of a lower high have added to market caution. These patterns have marked the start of longer downtrends in past cycles.

Moreover, on the weekly chart, Bitcoin dropped into a demand zone around $85,000–$86,000. This level supported a price bounce earlier in the year. After dipping below it, Bitcoin recovered and is now trading slightly above.

Rekt Capital explained that a weekly close above $86,000 could open the way for a move toward $93,000.

This area has few barriers, so the price may move between these two levels in the short term if momentum stalls.

Monthly MACD Turns Bearish Again

Another point being tracked is the monthly MACD, which has just crossed into a bearish setup. Analyst Ali Martinez pointed out that “the last three times the monthly MACD turned bearish, Bitcoin dropped about 60% on average.” If the pattern repeats, BTC could fall as low as $40,000 based on the previous peak around $110,000.

The MACD crossover in previous cycles has lined up with major corrections. Traders are watching this indicator to see if momentum continues to shift lower.

In addition, some longer-term Bitcoin holders have recently moved large volumes of coins. Several whale wallets have reduced holdings, including some early adopters. This behavior adds pressure on the market during periods of weakness.

Meanwhile, expectations for Federal Reserve rate cuts are rising again. Some traders believe this could support asset prices in the near term. However, unless Bitcoin reclaims resistance above $93,000, concerns about a larger correction are likely to remain.

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