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Bitcoin: Why analysts warn BTC could drop to $38K in current cycle

Bitcoin: Why analysts warn BTC could drop to $38K in current cycle

AMBCryptoAMBCrypto2026/02/28 21:00
By:AMBCrypto

Bitcoin [BTC] has witnessed reduced demand from U.S.-based investors in recent months. This fact was established using the Coinbase Premium, but it saw a positive development over the past few days.

Bitcoin: Why analysts warn BTC could drop to $38K in current cycle image 0

Source: CryptoQuant Insights

In a post on CryptoQuant Insights, user IT Tech pointed out that the metric saw a green blip for the first time since December. However, they were quick to issue a warning that this could be a fakeout.

Since November, the premium has been negative. For a brief period in mid-December, it flipped positive, but was not sustained. It needs to maintain above zero for 3-5 days before confirmation that U.S. demand is waking up.

Bitcoin: Why analysts warn BTC could drop to $38K in current cycle image 1

Source: CryptoQuant Insights

The realized volatility metric showed the market was in a phase of heightened volatility. The metric’s reading rose to 0.83 earlier this month, the highest since 2022. This metric is the annualized standard deviation of daily returns over 30 days.

The downtrend in 2022 saw strong price swings and signaled the start of large-scale repricing waves, the analyst noted.

Bitcoin: Why analysts warn BTC could drop to $38K in current cycle image 2

Source: Glassnode on X

Glassnode agreed with these findings. Its recent post on X, they used options data to show that the market was essentially in high . The 47% implied volatility on 1-month and 3-month contracts signaled that the market anticipated a 14% price move over the next 30 days.

Glassnode went on to state that the skew remained in put territory. This was further proof that the market was worried about a further drawdown over the next month.

Projecting the Bitcoin market bottom

Bitcoin: Why analysts warn BTC could drop to $38K in current cycle image 3

Source: CryptoQuant Insights

AMBCrypto had warned in a recent report that the bearish phase could extend another six months. The short-term bearishness and regulatory uncertainty could amplify the price swings, too, and macro factors such as war do not help boost market sentiment.

It is possible that the current bearish cycle could see Bitcoin prices drop to $38k, projected analyst Yonsei. The historical cycle drawdowns from all-time highs were used to map out this projection.

Comparison with the six‑month bear market bottom in 2022 shows alignment with a 70%–75% drawdown from the all‑time high. 

While the exact bottom remains uncertain, current evidence suggests it likely has not yet been reached.

Final Summary

  • The Coinbase Premium gap flipped positive for the first time since mid-December, but it needs to stay that way to signal recovery.
  • Recent events and the BTC price reaction, combined with volatility metrics, showed that the market is bracing for a deeper drop next week.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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