Bitcoin Could Plunge to $38K as Toxic Altcoins and Weak Ethereum Drag Market Down, Investor Warns

A seasoned investor is delivering a harsh warning to crypto traders: Bitcoin could crash to $38,000 if struggling Ethereum and failing altcoin projects continue draining the market. Gary Cardone says the digital asset industry faces a deadly combination of more sellers than buyers, cancerous altcoins with no revenue, and Ethereum’s inability to deliver spectacular results.

The Brutal Problem: More Sellers Than Buyers

Cardone’s core message is simple but alarming. Bitcoin currently has more sellers than buyers, creating downward pressure that could intensify if key market components fail. He’s willing to purchase 1,000 Bitcoin at $55,000 but is “done overpaying” and won’t chase prices higher.

The struggles facing many alternative cryptocurrencies reflect why some crypto ecosystems grow while others quietly die.

Key points from Cardone’s warning:

• Bitcoin faces a supply-demand imbalance with more sellers entering the market
• He prefers to layer in gradually rather than force purchases at current prices
• The sell-off could deepen significantly if support levels break
• At $38,000, “there are no buyers” – meaning legacy buyers won’t enter at that price

Why Ethereum Is a “Big Risk”

Ethereum’s struggles represent a critical threat to the entire crypto market. Cardone calls Ethereum “a big risk” and warns that if Ethereum and Bitcoin treasury vehicle Bitmine Immersion Technologies Inc (BMNR) can’t survive the current cycle, the fallout will “suck the life out of Bitcoin”.

The connection between Ethereum and Bitcoin is stronger than traders realize:

• Hundreds of copycat projects are built on Ethereum’s infrastructure
• If Ethereum doesn’t deliver “something spectacular,” these projects could implode
• A collapse in Ethereum-based projects would trigger massive market contagion.

Investors should remember that not every blockchain project succeeds, as explained in Before Bitcoin: The Failed Digital Currencies That Paved the Way.

The “Cancerous” Altcoin Problem

Cardone’s most controversial statement targets the broader altcoin industry. He describes the rest of the crypto industry as “cancerous,” citing projects with no revenue and unsustainable tokenomics.

What makes altcoins “cancerous”:

• No real revenue or business model
• Copycat projects without innovation
• Speculative tokens relying purely on hype
• Projects bleeding capital without sustainable growth

Cardone describes hearing “a sucking sound in the digital asset industry” – a metaphor for value draining from the market as toxic projects fail.

Cardone’s Price Targets and Strategy

Despite his bearish short-term outlook, Cardone’s investment strategy reveals patience and discipline:

Price Level	Cardone’s Action	Reasoning
$55,000	Will buy 1,000 BTC	Attractive entry point
$50,000-$55,000	Prefers to accumulate	Necessary for future growth
$38,000	Warning level	No legacy buyers exist here
Current (~$62,500)	Won’t overpay	Done chasing prices

Cardone notes Bitcoin touched its rising 200-day moving average near $62,000, historically a buy point, but he’s waiting for better prices.

Retail Sentiment Is Extremely Bearish

Market sentiment data confirms Cardone’s concerns. On Stocktwits, retail sentiment around Bitcoin remains in “extremely bearish” territory, while trading chatter stays at “high” levels. This combination often signals capitulation – when frustrated traders sell at lows, potentially creating a bottom.

Bitcoin Treasury Companies: “Embarrassing” Trade

Cardone also criticized Bitcoin treasury companies beyond major players like MicroStrategy (MSTR). He called the broader treasury-company trade “embarrassing,” suggesting many of these firms lack solid fundamentals.

While MicroStrategy might survive on its Bitcoin treasury strategy, Cardone doubts smaller treasury companies can withstand the current cycle’s pressure.

What Triggers the $38K Crash?

According to Cardone, three factors could drag Bitcoin to $38,000:

1. Ethereum’s Continued Struggle – If ETH fails to deliver breakthrough performance, Ethereum-based projects collapse
2. Altcoin Implosion – “Cancerous” projects with no revenue fail simultaneously, creating market contagion
3. Sustained Selling Pressure – More sellers than buyers continues without new buyers entering

The combination creates a feedback loop where failing altcoins drain liquidity, weak Ethereum undermines confidence, and Bitcoin absorbs the damage.

Historical Context: When Bitcoin Hits the 200-Day Moving Average

Cardone recalls a critical moment when Bitcoin was valued at $107-$108 and dropped below the 50-day moving average on the weekly chart. Historically, whenever this occurs, Bitcoin tends to fall to the 200-day moving average, currently around $55,000.

This technical pattern suggests the $38,000 target isn’t random – it represents a deeper correction if the 200-day support fails.

The Bottom Line: Capitulation Might Create Opportunity

Despite the grim warning, Cardone acknowledges that capitulation often marks the beginning of tradeable bottoms. He’s cautious about declaring the bottom has arrived but recognizes major sell-offs create opportunities for disciplined buyers.

Key takeaways for crypto traders:

• Bitcoin’s supply-demand imbalance is dangerous short-term
• Ethereum’s performance directly impacts Bitcoin’s price
• Toxic altcoins with no revenue pose systemic risk
• $55,000 represents a strategic entry point for serious investors
• $38,000 is a warning level where traditional buyers won’t enter
• Patience and disciplined accumulation beat chasing prices

Cardone’s message isn’t pure pessimism – it’s a call for caution and strategic patience. The crypto market needs healthier fundamentals, stronger Ethereum performance, and sustainable altcoin projects before Bitcoin can truly recover. Until those conditions materialize, the $38,000 risk remains real.