The biggest cryptocurrency in the world, BTC, fell below $59,000 earlier today before rising above the critical $60,000. Well-known cryptocurrency expert Willy Woo notes that while the recent fall in Bitcoin’s price has succeeded in clearing the market of undue leverage, more work remains.
A Drop in the Price of Bitcoin and Extended Liquidations
Following the news on Monday, June 24, regarding the Mt. Gox BTC repayment, the decline in the price of Bitcoin was intensified. Well-known cryptocurrency expert Willy Woo observed that the market has eliminated excess leverage, eliminating the $62,500 initial aim.
Despite this, traders have been adding new long positions, which has caused additional liquidations and a cascading long squeeze. Because of this, the price of Bitcoin fell to $58,000 earlier today.
Woo notes that in addition to the liquidation squeeze, the aftermath of Bitcoin miner surrender following the halving is still there. As the difficulty of mining has increased significantly, as we all know, Bitcoin miners have been selling aggressively to finance their hardware upgrades. Consequently, the poorest miners were compelled to liquidate and close their stores.
Bitcoin Temporary Reversal However, $54,000 Most likely
According to Woo, technical signs suggest a reversal in the price of bitcoin. Woo was spot on when he predicted that Bitcoin would reverse from its lows at $59,000 and now trade at $61,500.
However, the analyst has added caution, stating that BTC is still not out of the woods. The market has yet to determine how much speculative excess has been cleared. The price of Bitcoin can only rise steadily once there is a significant reduction in the bet on the future of the cryptocurrency.
$54k is the next layer of liquidations. And to do that, it’s so far below short term holders price that it would tip BTC into a bearish phase. (STH price is a line in the sand between bull and bear regimes.)
This is hard to do within the macro structure. pic.twitter.com/fjOk2Ss2wC
— Willy Woo (@woonomic) June 24, 2024
According to Woo, there’s a strong likelihood that BTC will drop much more. $54,000 is the next vital mark to watch, as that’s when more layer liquidations are likely to happen. If BTC falls to this level, it will likely enter the bearish phase, as it will be below the price threshold of short-term holders.
Woo further underlined that sliding below this level would be crucial given the current macro setup since it acts as a critical barrier between the bullish and bearish market regimes.
