Bitcoin
Will BTC price recover or face further declines?
Bitcoin recovered some of its losses over the weekend, closing at $58,250, just below its target of $58,450. However, the market is still cautious as the German government is selling its seized Bitcoin, signaling potential further sales of its reserves. What’s happening with Bitcoin? Analyst sheds light on Bitcoin’s recovery.
Experts like Willy Woo to believe They have the answer, and it involves a combination of risky bets and a post-halving shakeout among Bitcoin miners. Is there something more fundamental at play?
Dive deeper to find out what Woo says and why a possible recovery could be on the horizon.
Buy more Bitcoin, hold or sell?
Woo discussed the Sale of Bitcoin confiscated by the German governmentnoting the irony and the potential long-term bullish impact despite the market’s immediate concerns. He further updated that Mount Gox Bitcoin distribution, with 2.7 thousand BTC already distributed and 139 thousand BTC remaining, is a sign of a new market decline.
Woo noted that ETFs have been steadily buying the dip, suggesting an initial accumulation phase characterized by low volatility and Bitcoin leaving exchanges. He believes that paper bets have created an additional 140,000 BTC, significantly impacting market dynamics compared to the 10,000 BTC sold by the German government.
Looking at the current scenario, Woo predicts that the price of Bitcoin could either rise to $77K by targeting short positions or fall to $47K due to potential downward pressure. The key question is which direction the market will take.
Historical Post-Halving Patterns: What’s Next for Bitcoin?
Despite the local bearish signals, Woo’s risk signal does not indicate a bear market, supported by traditional bullish financial markets. He said long-term investors can profit from the deep consolidation phase, which aims to liquidate traders and create maximum pain.
Woo advised caution for those trading on leverage, recommending waiting for the hash rate to recover and favoring spot margin trading over futures to mitigate the risks associated with high speculation. After reaching an all-time high on April 27, the hash rate has fallen 7.7% to 576 EH/s, a four-month low. This decline shows that some miners are cutting back operations, reflecting the financial stress post-halving.
Since Bitcoin’s last halving on April 19, 2023, historical patterns suggest that there could be more declines ahead. Based on these trends, analyst Peter Brandt warns that Bitcoin could face further declines. Analyst Ali Martinez says that for Bitcoin to start rising again, it needs to reach $61,000 as it currently has no strong support levels.
Finding the silver lining
Despite the challenges, Willy Woo remains cautiously optimistic. He sees the current phase as a necessary adjustment period, particularly for weaker miners. Before a sustainable rally can occur, Woo suggests the market needs to manage excess futures open interest, potentially targeting a critical liquidation level near $54,000.
Do you agree with Woo’s analysis? Share your thoughts.
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