A popular cryptocurrency analyst warns that Bitcoin faces a brutal second quarter as market participation weakens. The analyst, known as Mr. Wall Street, has shifted to a fully bearish stance, suggesting a potential decline toward $40,000. Separate on-chain data shows Bitcoin transaction fees have dropped to lows last seen at market bottoms, often preceding high volatility.
A prominent analyst warns that Bitcoin is entering a potentially brutal second quarter. Mr. Wall Street stated his earlier short-term bullish thesis has shifted to a fully bearish outlook across all timeframes.
He said the recent 27% rally to $76,000 was likely a move to create liquidity for a larger downside. The analyst has closed long positions and opened short positions, expecting a broader decline.
A large amount of liquidity has built below current prices, supporting a potential drop toward $40,000-$45,000. Ongoing geopolitical risks in the Middle East could also trigger a global recession, weighing on risk assets like Bitcoin.
Echoing concerns about weakening fundamentals, João Wedson of Alphractal flagged reduced network activity. He found Bitcoin’s daily transaction fees in U.S. dollars have fallen to multi-year lows.
Such low fee generation indicates weak network demand, a condition historically linked to intense volatility. In a separate post, Wedson warned traders against chasing green candles in a bearish market.
He argued this behavior often provides exit liquidity for larger players instead of benefiting retail investors. Bitcoin faced a fresh decline of nearly 3% on Friday, dropping toward $66,000.
