In a recent analysis, the renowned crypto analyst sounded the alarm as it slipped below a critical supply zone of $41,200 to $42,400.
Martinez, using on-chain data from IntoTheBlock, highlighted that 1.87 million addresses holding a substantial 730,000 BTC have accumulated in this precarious area.
The downturn has raised concerns about potential sell-offs as holders seek to cut losses, increasing selling pressure. Martinez warns of a potential drop to the next area of demand, between $37,500 and $38,700, where 1.28 million addresses hold 553,000.
The question then arises: If holders at a loss start selling, triggering a pullback to $38,700, will buyers show interest in this chaotic market where unexpected “black swan” events are always a possibility?
Gap
In addition to the cautionary outlook, another market indicator, the futures chart on the CME, points to a potential decline. In early December, a gap was formed between $39,640 and $40,325 per BTC, and common sense dictates that such gaps are expected to close.
Source: If history repeats itself, this gap could be filled as part of a bearish move, reinforcing the possibility of a descent to the $37,500 level.
The bulls are holding their ground, but the looming challenges may put their resilience to the ultimate test.
