Bitcoin recovered some of its losses over the weekend, closing at $58,250, just below the target of $58,450. However, the market is still cautious because the German government is selling its seized Bitcoin, which signals potential further sales from their reserves. What’s going on with Bitcoin? The analyst clears the doubt about Bitcoin recovery.
Experts like Willy Woo believe they have the answer, and it involves a combination of risky bets and a post-halving shakeup among Bitcoin miners. Is something more fundamental at play?
Dive deeper to discover what Woo says and why a potential rebound could be on the horizon.
Buy more Bitcoin, hold, or sell?
Woo discussed the German government’s sale of confiscated Bitcoin, noting the irony and potential long-term bullish impact despite immediate market concerns. He further updated that Mt. Gox Bitcoin distribution, with 2.7k BTC already distributed and 139k BTC remaining, is a sign of a further market crash.
Woo observed that ETFs have been steadily buying the dip, suggesting an early 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 Bitcoin’s price could 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 go.
Historical Patterns Post-Halving: What’s Next for Bitcoin?
Despite local bearish signals, Woo’s risk signal does not indicate a bear market, supported by bullish traditional financial markets. He said long-term investors can profit from the deep consolidation phase, which is meant to liquidate traders and create maximum pain.
Woo advised caution for those leverage trading, recommending waiting for a hash rate bounce and favoring spot margin trading over futures to mitigate risks associated with high speculation. After reaching a record high on April 27, the hash rate fell 7.7% to 576 EH/s, a four-month low. This reduction shows some miners are cutting operations, reflecting post-halving financial stress.
Since the last Bitcoin halving on April 19, 2023, historical patterns suggest there might be more declines ahead. Based on these trends, analyst Peter Brandt warns that Bitcoin could face further drops. Analyst Ali Martinez says that for Bitcoin to start rising again, it needs to reach $61,000, as it currently lacks strong support levels.
Finding the Silver Lining
Despite challenges, Willy Woo remains cautiously optimistic. He views 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 excessive 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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