Coin Edition -
- Bitcoin price crashes 7.4% to $58K amid leverage flushing and miner selling.
- Analyst Willy Woo highlights that Bitcoin is nearing a potential reversal on daily candles.
- Yet, he warns of further crash to $54K as leveraged positions abound.
Bitcoin analyst Willy Woo, known for his long-term market outlook, has broken his usual silence on short-term predictions to address the recent 7.4% crash in Bitcoin’s price, attributing it to a combination of leverage flushing and miner capitulation.
In the most recent X post (formerly Twitter), the analyst offered an in-depth analysis of the current volatile state of the Bitcoin market, notably the attributed drop from its intraday high of $63,292 to retest the low of $58,601.
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
The analyst explained that the market is experiencing a process of leverage flushing, with billions of dollars in long positions being liquidated. He noted that a Bitcoin retracement to the $62,500 region was the critical target to eliminate most of the leveraged positions.
However, based on market data, speculators continued to open new long positions, exacerbating the situation and leading to a cascading long squeeze. The analyst observed that this downward pressure drove Bitcoin to the $58k cluster, which has now been breached.
Meanwhile, leveraged traders are not solely responsible for the market decline. The market is also experiencing a post-halving miner capitulation alongside the liquidation squeeze. This month, Bitcoin miners have sold over 30,000 BTC, valued at around $2 billion.
Woo explained that miners are selling their BTC reserves to finance hardware upgrades, as outdated equipment has become unprofitable. This has caused the weakest miners to shut down operations and liquidate their assets.
Furthermore, Woo mentioned that the market is nearing a reversal on daily candles. If this reversal materializes, it could lead to a bullish divergence, correcting the overselling in the market.However, Woo cautioned that Bitcoin is not yet in the clear. Without a significant reduction in futures open interest, the system remains unprepared for a bullish shift, according to the analyst. He foresees a further decline to the $54K price point.
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