After bottoming at $15,000 following the sudden bankruptcy of FTX in November 2022, Bitcoin recorded a tremendous rise in 2023 and 2024, surpassing its ATH of $69,000.
While BTC is in a downtrend after the new ATH in March, investors are expecting a serious bullish move.
At this point, experienced analyst Willy Woo said that BTC's price action should become very boring indeed before a major rally.
On-chain analyst Willy Woo analyzed the current situation in Bitcoin, claiming that leveraged trading in the market should be liquidated more as a potential catalyst for Bitcoin’s next rally.
The market remained in a downtrend until early August due to widespread speculation regarding a significant inflow and sale of 100,000 BTC from the German government, the US Department of Justice (DOJ), and the bankrupt Mt. Gox exchange.
At this point, Woo pointed out that Bitcoin investors had experienced a significant amount of liquidation during the sharp decline in August, and said that he saw the decline as a “healthy correction” as these events suppressed Bitcoin's price increase.
According to Woo, leveraged positions need to be cleared more for Bitcoin price movements to become more stable.
Woo noted that Bitcoin in general has shifted from a short-term bearish trend to neutral, but the long-term outlook remains bullish.
The experienced analyst finally pointed out that the Bitcoin balance on exchanges has decreased, adding that a low BTC balance generally indicates an upward trend.
“…
There was a lot of leverage liquidation in the August drop. I think we're 66% there. Most of the speculation is gone, we still need more spot BTC to be absorbed.
For a strong rally to occur, the BTC price action needs to really get boring and the selling pressure in the Bitcoin markets needs to ease.
But the good news in the long term is that we are not in a bear market. It's just a very long consolidation.”
I've been on RnR for a while, but…
Here's the chart I like best to set the scene.
Less inventory = bullish
Until the start of Aug, we've been in a bearish stance with an influx of 100k coins (Germany, MtGox, DOJ) while speculation has been rife creating more paper BTC. pic.twitter.com/Yq7yhMpRZ8
— Willy Woo (@woonomic) August 21, 2024
*This is not investment advice.
