The price of Bitcoin (BTC) was able to recover to about $61K. Here’s what you need to watch according to this analyst.
Bitcoin’s price has been on a rollercoaster throughout the past couple of days, resulting in hundreds of millions of liquidations across the board.
Traders and analysts are now speculating on what’s next, with Willy Woo giving some insights on BTC’s short-term price targets.
BTC Bounces Back Above $61K
The BTC price went off a cliff yesterday, plunging to a low not seen since the beginning of May.
As seen in the chart below, the cryptocurrency tumbled to somewhere around $58,400 before staging a recovery.
This uptick in volatility caused a lot of liquidations in the futures market. Their number reached $360 million for the past 24 hours, with the overwhelming majority of them being long positions – as expected.
According to data from Coinglass, around $280 million of the liquidations were long.
Willy Woo, a well-known proponent and crypto veteran, provided an analysis of what happened and what the next steps for BTC should be.
What’s Next for the Bitcoin Price?
According to Willy Woo, yesterday’s move was largely caused by the long liquidation cascade in the futures market.
He argued that the main initial target for wiping off leverage was $62.5K, but then speculators kept adding to new long positions, “just adding more fuel for more liquidations in a cascading long squeeze.”
I don't usually do short time frame price action as it's the domain of gamblers. But worth a break down of what's happening given the fear in the market…
We've been flushing out the leverage, 62.5k was the target to get most of it.
Until… https://t.co/ughwSKGYoo
— Willy Woo (@woonomic) June 24, 2024
An additional factor for the crash was the capitulation of miners:
“Superimposed on this liquidaiton squeeze, we have a post halving miners capitulation. MIners are on a BTC selling spree to pay for hardware upgrades due to the old hardware no longer being profitable. The weakest miners closing shop and being liquidated,” stated Woo.
Woo predicted that short-term technical factors point to a reversal and that seems to be what happened – the BTC price went back up to about $61K.
However, the analyst warned that “BTC is not out of the woods.” According to him, it’s important to monitor how much of the speculation (read: leveraged positions) got cleared out of the system.
Without purging futures open interest, the system is not ready to move up.
On that front, data shows that less than 3% of the BTC open interest has been wiped off in the past 24 hours.
