Bitcoin (BTC) price, the world’s largest cryptocurrency, fell below the critical $60,000 support level at $59,000 earlier today, but later rebounded above that level. Prominent cryptocurrency analyst Willy Woo explained that the recent Bitcoin price correction has helped clear excess leverage in the market, but the correction process is not yet complete. Here are the details…
Long positions were effective for the Bitcoin price
Monday, June 24 at Mt. After the Gox Bitcoin refund announcement, the Bitcoin price fell further. Woo noted that the market has begun to clear excess leverage, bypassing the initial target of $62,500. Despite this, speculators continued to add new long positions, leading to further liquidations in a gradual long squeeze. This caused the Bitcoin price to drop to $58,000 earlier today.
Woo points out that in addition to the liquidation squeeze, the post-halving Bitcoin miner capitulation effect is still ongoing. As we at Kriptokoin.com reported, as mining difficulty increased significantly, Bitcoin miners were selling heavily to fund hardware upgrades. This forced the weakest miners to close shop, leading to liquidation.
There is an expectation of 54,000 for BTC in the short term
Woo said technical indicators point to a reversal in Bitcoin price. Bitcoin followed Woo’s predictions, reversing from lows below $59,000 and currently trading at $61,500. However, the analyst warned that Bitcoin is not yet completely safe. The market has yet to realize how much speculative excess has been cleared out so far. Without a significant reduction in BTC futures positions, the Bitcoin price will not move up sustainably.
Woo believes that Bitcoin could hit new lows and the next critical level will be $54,000, where another wave of liquidations will occur. A drop to this level would push BTC below the price point of short-term investors, thus typically entering a bear market. Woo also emphasized that this level acts as a critical boundary between bullish and bearish market regimes and that a break below this level will be critical considering the current macro setup.
Factors shaping the future of Bitcoin
According to Ki Young Ju, Founder and CEO of CryptoQuant, Bitcoin’s price is currently shaped by three main buying liquidity channels: fiat currencies, stablecoins, and exchange-based ETFs. These factors influence the market trend and influence the cryptocurrency price until June. Current statistics show that the stablecoin market cap is rising but is still relatively close to previous ATHs compared to the BTC market cap. Market analyst Ki Young Ju said that the stablecoin exchange reserve ratio is also quite similar to these ATH levels.
This suggests that stablecoins are already being used in buying liquidity, and further large price movements may require more stablecoin inflows to spark another large rally. At the same time, the Coinbase premium has been negative over the past week, which can be attributed to the overall market sentiment and the lack of strong fiat inflows to push the Bitcoin price higher.
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