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Oil just entered a bear market, and BofA says it's heading to $30

Crude officially entered a bear market with Tuesday's drop, and one technical strategist is seeing another 30 percent drop in the commodity.

On CNBC's "Futures Now" Tuesday, Paul Ciana of Bank of America Merrill Lynch said that based on the charts, oil is well on its way to dropping to the $30 range, levels unseen since last April.

"It just keeps going down, breaking supports and failing at lower resistance levels," said Ciana. "It's the absolute definition of a downtrend."

But on the same chart of oil, Ciana also pointed out that the crude crush could actually be signaling a rally in the bond market. A note released by BofAML on Tuesday, titled "Bonds smile as oil cries," remarked on the inverse moves between crude and bonds that has been occurring over the past years. According to Ciana, the inverse relationship is playing out once again "on an even larger scale," meaning that if crude continues to fall, bonds could soar even higher.

"Bond prices have risen to exceed the peak of [that double bottom this year, confirming] that the U.S. 10-year yield will likely fall to 1.97 percent this summer, if not sooner," he explained.

Additionally, stocks could also be in trouble if crude falls. While Ciana doesn't see oil being a direct cause of a downturn in the market, depending on "how much more the decline accelerates" in crude, it could intensify any drop that may happen. And the outlook for crude on a fundamental basis isn't too positive, as Ciana also points out that demand for crude may fall during the summer.

With Tuesday's drop, oil prices have now sunk 19 percent year to date, largely thanks to supply issues related to OPEC and non-OPEC countries. Ciana does see $45.50 being a key level to reach and hold for oil, meaning that the commodity would need to rally 4 percent for some of the concerns to subside.

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