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Highlights
- Bitcoin miner capitulation continues pushing BTC price under $60K first time in 45 days.
- BTC price drop has helped to flush out excessive leverage but concerns still remain.
- Woo warns that without a significant reduction in futures positions, the price could drop to $54,000.
Earlier today, Bitcoin (BTC), the world’s largest cryptocurrency, briefly dipped below $59,000 before rebounding above the critical $60,000 support level. Popular crypto analyst Willy Woo explained that the recent Bitcoin price correction has helped eliminate excessive leverage in the market, though the correction process is not yet complete.
Bitcoin Price Correction and Long Liquidations
The Bitcoin price correction was exacerbated following the Mt. Gox Bitcoin repayment announcement on Monday, June 24. Popular crypto analyst Willy Woo noted that the market has been flushing out excess leverage taking out the initial target of $62,500.
Despite this, speculators have continued to add new long positions leading to further liquidations in a cascading long squeeze. this led to the BTC price dropping further to $58,000 earlier today.
Along with the liquidation squeeze, Woo points out that the effect of post-halving Bitcoin miner capitulation still continues to hover around. As we know, Bitcoin miners have been selling heavily to finance their hardware upgrades as mining difficulty has spiked considerably. This led to the liquidation of the weakest miners forced to shut down their shops.
BTC Short-Term Reversal But $54,000 Likely
Woo stated that technical indicators are pointing out a Bitcoin price reversal. Bitcoin has behaved exactly as per Woo’s prediction, reversing from the lows under $59,000, and currently trading at $61,500 levels.
However, the analyst has further cautioned that Bitcoin is still not entirely out of the woods. The market still needs to figure out how much speculative excess has been flushed out so far. Without a significant reduction in the BTC futures position, the Bitcoin price won’t move upward sustainably.
$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
Woo believes there’s a good enough chance that Bitcoin can see new lows and that the next key level to watch for would be $54,000 where another layer of liquidations would occur. Dropping to this level will push BTC below the price point of short-term holders, thereby typically dipping into the bearish phase.
Woo further emphasized that this level serves as a critical boundary between the bearish and the bullish market regimes and falling under this would be critical considering the current macro setup.
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