Bitcoin Price Forecast: Bearish 2021 Fractal Reappears as BTC Risks Slide Toward $40K

Published: Dec 08, 2025

Author: Yashu Gola

Key Points

• Analysts observe a 2021-style double-top fractal indicating a potential decline.
• Current market structure suggests a drop to $55K–$50K, with a longer-term target near $40K.
• Rejection from a multiyear ascending trendline raises concerns of a significant downturn.

Market Analysis

Bitcoin (BTC) is showing signs of a bearish trend reminiscent of its post-peak structure from the 2021 bull market. Analysts are increasingly concerned about the risk of a decline towards the $40,000 level in the upcoming months.

Fractal Analysis

The weekly chart reveals a double-top formation near cycle highs, followed by a sharp decline into a major support zone, a brief rebound, and a subsequent “bull trap” that fails to regain momentum. This pattern mirrors the events of late 2021, where Bitcoin's recovery above the $40,000 support was rejected, leading to a prolonged downtrend.

In 2025, after peaking above $126,000, Bitcoin has retraced into its cycle support area, ranging from approximately $82,000 to $88,000. The recent bounce appears to be a classic bull trap, with momentum stalling below $95,000, where sellers have regained control, similar to the 2021 scenario.

Potential Downside Targets

If the fractal pattern continues, Bitcoin could break below its support floor, entering a more severe corrective phase. Initial downside targets are set at the $55,000–$50,000 range, with an extended target near $40,000, reflecting the scale of the previous drawdown.

Analyst Insights

Analyst Alex Wacy has predicted a decline to $40,000, citing a bearish rejection from a multiyear ascending trendline, which has historically preceded significant corrections of up to 70%.

Market Dynamics

Some analysts argue that Bitcoin's cyclical trends may be changing due to recent institutional developments. Hunter Horsley, CEO of Bitwise, suggests that the market has entered a new structure with different dynamics following the launch of Bitcoin ETFs. He believes that the current setup for crypto is stronger than it has been in recent months.

Onchain Data Insights

Despite a 36% pullback, onchain data indicates that total cryptocurrency inflows to Binance remain low, suggesting that investors are not rushing to sell. Historically, significant corrections have led to spikes in inflows, but this time, inflows are stable, indicating that holders are willing to ride out the decline.

Conclusion

The current market conditions for Bitcoin suggest a potential for further declines, with analysts closely monitoring the fractal patterns and market dynamics. The unusual calm among holders may provide a foundation for recovery once the structural retest of cycle support is completed.