Bitcoin (BTC) has been struggling to regain momentum in the market, failing to surpass its nearest resistance level of $94,000 for over a month. The cryptocurrency is currently trading within a broad range between $85,000 and $93,000, leading to growing concerns about further price corrections in the upcoming months.
Amid this uncertainty, market expert NoLimit recently expressed on social media platform X (formerly Twitter) that he anticipates Bitcoin could bottom out at around $40,000 sometime in 2026. This forecast implies a significant 54% decline from current levels, which are just above $87,860.
A Historical Perspective On Market Cycles
NoLimit’s analysis outlines several reasons for this predicted downturn. He points out that Bitcoin has a historical tendency to surprise investors, often when confidence in the market is high. While each price cycle may appear unique on the surface, NoLimit argues that the underlying mechanics remain largely unchanged.
He emphasizes the cyclical nature of Bitcoin, noting that it moves within a four-year cycle influenced by liquidity, leverage, and human behavior rather than mere sentiment.
According to him, the market is currently late in this cycle, and Bitcoin has consistently followed a three-step process during past upward movements.
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First, Bitcoin tends to surge in price following the Halving event. This is typically followed by an influx of maximum leverage and late-stage buyers. Finally, the cycle concludes with a sharp and often chaotic reset before the next significant price expansion occurs.
Historically, Bitcoin has experienced steep declines during these resets, such as an approximate 85% drop in 2013-2014, an 84% drop in 2017-2018, and a 77% drop during the 2021-2022 cycle. In each scenario, investors were convinced that the conditions were different, yet the outcomes remained consistent.
$40,000 As Foundation For Bitcoin’s Next Bull Run
Considering the current market situation, NoLimit highlights several critical indicators. He notes that Bitcoin has already seen substantial price appreciation, with institutional interest and exchange-trade fund (ETF) approvals now part of the landscape.
He also observes that many traders are over-leveraged, market volatility is compressed, and there exists widespread hope for further price increases. These factors often signal a heightened risk of downside movement in the market.
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A potential drop toward the $40,000 range should not be viewed as an unforeseen disaster, according to NoLimit. He argues that significant price declines have historically preceded major upward movements.
Additionally, this price target aligns well with several technical indicators, including previous resistance levels that have turned into support, long-term moving averages, and the liquidity gap created by ETF approvals.
Such factors suggest that a move toward this region could exhaust forced sellers and provide a solid foundation for recovery.
Featured image from DALL-E, chart from TradingView.com