Bitcoin's Key Moving Averages Signal a Potential Drop to $38,000
As we wrapped up 2025, Bitcoin (BTC) concluded the year on a disappointing note, trading over 30% lower than its peak values and dealing with an unsettling technical pattern known as a death cross. This indicator has historically signaled impending major price declines.
Currently sitting just above $89,200, Bitcoin experienced a significant event on December 8 when its 10-week and 50-week simple moving averages (SMAs) intersected. This notable crossover was brought to light by market analyst Ali Martinez on the social media platform X, previously recognized as Twitter.
Bitcoin Could See a 50%-60% Price Correction
Martinez pointed out that it’s crucial to monitor how these two moving averages behave on the weekly chart. Historically, every time Bitcoin has exhibited a death cross between the 10-week and 50-week SMAs, it has been followed by considerable price corrections.
Looking at the cryptocurrency's weekly chart reveals that previous instances of such crossovers have resulted in significant price drops: 67% in September 2014, 54% in June 2018, 53% in March 2020, and 64% in January 2022.
With the recent formation of this death cross, Martinez posits that if past trends hold true, Bitcoin could be poised for a correction ranging from 50% to 60%. This potential decline would see its price falling within a bracket of $50,000 to $38,000.
Adding to the complexity, market specialist Mags has outlined two possible scenarios for Bitcoin's short-term future.
Two Potential Paths for Bitcoin's Future
Since peaking in October at over $126,000, Bitcoin has been fluctuating around the $85,000 mark for several weeks. During this period, Tether's USDT dominance has surged beyond its previous levels, now consistently operating above this breakout threshold.
Given that Bitcoin and USDT dominance typically move in opposite directions, Mags has identified two primary scenarios unfolding. The first is a bullish outlook, suggesting that if USDT dominance starts to decline, the current breakout could be a false signal.
Mags believes this shift could spark a new surge in Bitcoin's price, potentially pushing it towards a new all-time high before any substantial sell-off takes place.
On the flip side, Mags also describes a second scenario that hints at a deteriorating market structure. If the overall market trend weakens, Bitcoin might see a brief rebound, while USDT dominance establishes a higher low in its mid-range before starting to climb again.
In this scenario, BTC would likely follow a gradual distribution pattern, characterized not by a sudden crash or steep drop but by a slow and uneven downward trajectory often seen in early bearish market conditions.
The forthcoming movements in USDT dominance are crucial in determining whether the current market represents a temporary pause before further price progression or the beginning of a prolonged distribution phase leading up to a fresh all-time high.
