Luke Gromen Warns of ‘March 2020-Style’ Bitcoin Flush; Targets $40K
Macro analyst Luke Gromen warns of a liquidity vacuum similar to the COVID crash, predicting Bitcoin could tumble to $40,000 as it fails to keep pace with gold.
Macro strategist Luke Gromen has issued a severe warning to crypto investors, predicting a liquidity shock comparable to the March 2020 COVID crash could hit Bitcoin before any long-term rally materializes. In a recent update to investors, the FFTT founder outlined a confluence of technical failures and macro headwinds that could force the asset down to the $40,000 range in 2026.
The Liquidity Air Pocket
Gromen, historically a proponent of the "debasement trade," argued that Bitcoin is currently failing its primary audition as a neutral reserve asset. While gold has surged to record highs, Bitcoin has struggled to maintain momentum, currently trading around $95,200, down nearly 25% from its October 2025 all-time highs.
The analyst pointed to three specific signals flashing red:
- Relative Weakness: Bitcoin's inability to make new highs relative to gold.
- Technical Breakdown: The loss of critical moving averages, signaling a shift in trend.
- Narrative Fragility: Growing institutional concern over quantum computing risks, which Gromen cites as a rising "headwind" for sentiment.
"A potential COVID March 2020-style market capitulation could rock bitcoin and financial markets in the near future before any sort of liquidity-driven rally arrives," Gromen noted.
The $40,000 Thesis
The projection implies a staggering 58% drawdown from current levels. Gromen revealed he had already strategically reduced his Bitcoin exposure in late 2025, shifting capital into gold and industrial equities which he believes are better positioned for the coming "realpolitik" era of supply chain security and fiscal dominance.
While acknowledging he remains structurally bullish on the necessity of debt monetization, a tide that typically lifts all scarce assets, he emphasized that Bitcoin is behaving like a "high-beta tech stock" rather than digital gold in this specific liquidity cycle. Under these conditions, he argues the asset should be "tactically reduced rather than held unconditionally."
Bitcoin (BTC) traded flat at $95,150 on Saturday, struggling to reclaim the $100,000 psychological level as volume across major exchanges continued to thin.
