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It’s been a bad week for Bitcoin. The largest crypto dipped below $40,000 as crypto markets lost $1 trillion in market cap.

Technical indicators are not looking good either. Bitcoin metrics are approaching the so-called “death cross”.

The ominously named technical indicator triggers when BTC’s 50-day moving average fell below the 200-day moving average.

Typically, the indicator signals an even more bearish turn for the asset. In traditional markets, it is usually a signal that investor sentiment has shifted lower.

The reasons for this are obvious. Investors are concerned about the Federal Reserve raising interest rates. Fed’s move will likely hurt both risk assets and inflation hedges, and Bitcoin is both.

Bitcoin’s dip could also be connected to the drop in network hash rate, following the chaos in Kazakhstan. Specifically, the Central Asian country is the second-largest mining hub in the world. Still, miners opted not to leave, betting that the situation would go back to normal shortly.

However, it is important to note that the “death cross” indicator is not perfect. In the past, it had mixed results.

In 2014 and 2018, the death cross preceded a major selloff and a bear market.

However, in 2020 and 2019, the death crosses signaled BTC hitting a bottom. That means that actually, the death cross was a good sign, a sign of reversal.

Has BTC Bottomed Out?

That is exactly what one investor predicts will happen now. Last week, billionaire investor Mike Novogratz called the bottom for Bitcoin.

Crypto had a monster year last year. It’s hard to think you’re going to grow to the sky nonstop. This is a pullback

The ex-hedge fund manager said that he doesn’t expect Bitcoin to drop any further.

We see a tremendous amount of institutional demand on the sidelines. I’m not nervous in the medium-term.

However, he did caution about the risk of volatility. He did, in fact, say that he sees “a lot of support” for BTC at $38K to $42K.

I know big institutions who are going through their process to put positions on. They’re going to see those as attractive levels to buy.

He even named a specific price range below which he doesn’t think BTC will go.

On the charts, $38,000, $40,000 feel like where we should bottom

Currently, Novogratz is the CEO of Galaxy Investment Partners, which focuses on crypto investments. The company functions as his family office.

Cheap BTC Boon For Miners?

In any case, few investors think that Bitcoin will be reclaiming its all-time high any time soon. BTC reached its high of $64,800 as recently as April 2021.

Lower prices also mean that it is less profitable to mine Bitcoin. That is why mining stocks have taken a beating as well.

However, one analyst thinks that lower prices will actually be good for mining stocks. For one, it will get rid of the competition.

As BTC prices drop, new players will be less likely to enter the mining business. On the other hand, miners with less efficient setups, or higher energy costs, will scale back operations.

This will all benefit large-scale, efficient miners. Incidentally, those are also the types of mining rigs run by publically traded companies.

Companies such as Bitfarms, a mining company in Canada, bought the dip last week. In fact, the miner bought 1000 BTC for $43.2 million.

Therefore, paradoxically, that means that mining stocks could benefit from lower potential profits in the space.