Bitcoin (BTC) saw a strong selling pressure earlier this week, leading to a price drop below $61,000. Crypto analyst Willy Woo believes that the current pump in the market is temporary, and bears still dominate the market. Despite the recent price correction that cleared excess leverage in the market, Woo suggests that there is still some froth in the market with speculative trades for BTC still prevalent. The strong BTC liquidations sent the price to $58,000 in oversold territory, leading to a bounce back before falling further.
Woo emphasizes that the current BTC price bounceback is technical rather than fundamental, pointing out the presence of a TD9 reversal and hidden bullish divergence. He believes that a break of the RSI trendline would indicate a technical recovery. However, he states that the market correction for overselling does not necessarily justify further bullish action based on fundamental demand and supply for Bitcoin. Woo adds that investors may need to wait for a dull period of BTC price action, suggesting accumulation of spot holdings and exiting the market out of boredom.
For the formation of fundamental bullish structures in BTC’s price, Woo highlights the importance of demand outstripping supply. He notes that spot buyers actively purchasing coins from exchanges is a positive sign, but synthetic coins are not being sufficiently replaced. The issue lies in the need to purge speculators creating synthetic coins, with a wait for the hash rate to bounce back as a leading sign that miners have stopped selling to fund hardware upgrades. Woo suggests that investors should accumulate spot holdings and allow speculators to exit the market, emphasizing the need for patience in the current market conditions.
In conclusion, Woo predicts that the current BTC reversal is just technical and investors may need to endure a few more weeks of dull price action. He suggests that it is not the time for overly bullish speculation and urges speculators to liquidate their positions and exit the market. Woo emphasizes the importance of accumulating spot holdings and waiting for a bounce back in the hash rate as a sign of positive market conditions. Overall, the market remains uncertain with bears still in control, and investors should proceed with caution and patience in their investment decisions.
