Introduction
A critical technical indicator that has historically marked the final capitulation phase of Bitcoin bear markets is flashing again. Chartist Ali Martinez warns that a confirmed ‘death cross’ on Bitcoin’s three-day chart could trigger a decline toward $40,000 or even $30,000 in late February, as recent market volatility, exacerbated by U.S. policy shifts, has already pushed BTC into a state of heightened fear and uncertainty.
Key Points
- The death cross on Bitcoin's 3-day chart has accurately signaled the final bear market decline after each major cycle top since 2014.
- Recent tariff-related volatility triggered $2.3 billion in hourly sell volume and over $81 million in long liquidations, slashing open interest by more than half since January.
- Despite the bearish signal, the analyst cautions that historical patterns don't guarantee future price action, even as current structure aligns with past pre-bottom setups.
The Ominous Signal: A Historical Precedent for Final Declines
Technical analyst Ali Martinez has identified a potentially bearish formation on Bitcoin’s three-day chart: a looming ‘death cross’ between the 50 and 200 simple moving averages. According to Martinez, this specific chart setup has been a remarkably reliable harbinger of the final, steep decline in Bitcoin bear markets since 2014. The three-day timeframe is cited as crucial for understanding BTC’s macro structure, with the interaction of these moving averages signaling the last major downside move before a macro bottom forms.
The historical data provided by Martinez is stark. Following the 2013 market top, Bitcoin had already dropped over 72% before the death cross printed in December 2014; after the signal, it fell another 52%. The pattern repeated after the 2017 peak, with the death cross appearing in November 2018 just before a final 50% decline. Most recently, after the 2021 top, the signal emerged in May 2022 and preceded an additional 45% drop. Bitcoin registered a new all-time high of above $126,000 in October 2025, but its current price—hovering near $66,000—is nearly 48% below that peak, setting a stage similar to past cycles.
Martinez projects that if history repeats, a further 30% decline from current levels would place Bitcoin near $40,000, while a 50% drop could see it fall to $30,000. However, the analyst from CryptoPotato was careful to note that while the current structure matches historical setups, there are no guarantees the price drops will materialize. The signal, while historically significant, indicates a potential path rather than a certain destiny.
Market Reaction: Tariffs Trigger a Liquidation Cascade
While the technical setup paints a concerning macro picture, recent market action has been driven by concrete geopolitical events. Bitcoin is down about 2.5% in the last 24 hours and more than 4% over the past week, but it has shed nearly 27% of its value in the past month. This sharp decline was exacerbated by an announcement from U.S. President Donald Trump regarding global tariffs. After the U.S. Supreme Court struck down many previous tariffs imposed under a 1977 emergency law, Trump announced a new 10% (later upgraded to 15%) temporary global tariff.
As seen in past episodes of tariff-related volatility, the impact on Bitcoin was not immediate but arrived once legacy futures markets opened. This event sparked a coordinated bearish impulse. Data from analyst Axel Adler Jr. showed that taker sell volume in the futures market spiked to a staggering $2.3 billion in a single hour. This selling pressure was accompanied by forced long liquidations of approximately 1,247 BTC, worth more than $81 million at the time.
On-chain analytics firm Santiment confirmed the liquidation cascade, noting that aggregate open interest plummeted to $19.5 billion. This figure represents less than half of its peak in January 2025. The rapid unwind of leveraged positions has led to skyrocketing negative sentiment, with Santiment characterizing the Bitcoin market as entering ‘FUD mode’—a state dominated by fear, uncertainty, and doubt.
Navigating the Crossroads: Pattern vs. Uncertainty
The convergence of a ominous technical pattern and a sharp, news-driven sell-off presents a complex picture for Bitcoin investors. The death cross signal, as highlighted by Ali Martinez, suggests the market may be entering the painful final phase of a bear cycle, where weak hands capitulate. The historical precedent is clear: this signal has consistently appeared before the last major decline prior to a macro bottom forming for Bitcoin.
Yet, the current environment is also uniquely shaped by external shocks, notably the policy moves from the United States under President Trump. The market’s reaction—evidenced by the massive taker sell volume and liquidations—shows how sensitive crypto remains to traditional finance flows and geopolitical announcements. The drastic reduction in open interest indicates a market rapidly de-risking, which can sometimes precede a stabilization, even if it arrives after significant pain.
Ultimately, the narrative hinges on whether history will rhyme. The death cross on the three-day chart is flashing, and the market structure aligns with past setups that led to declines of 45% to 52%. If the pattern holds, the road to a sustainable macro bottom for Bitcoin may pass through the $40,000 to $30,000 range. However, as Martinez and the data from the recent sell-off remind us, markets are driven by both predictable cycles and unpredictable events, leaving the path forward fraught with both technical warning signs and fundamental uncertainty.
📎 Related coverage from: cryptopotato.com
