Markets
Why Bitcoin Could Drop Further to $47,000 in This Market Correction
According to technical analyst Willy Woo, the price of Bitcoin could potentially drop to around $47,000 during this market correction.
This scenario would result in an overall retracement of 36%, which is also not unprecedented in bull market cycles.
On July 8, Woo posted a market outlook to his 1.1 million followers on X, concluding that markets had entered a phase of macroeconomic consolidation but did not rule out further declines.
“This is a deep consolidation designed to piss you off and liquidate traders to the point of maximum pain. $47,000 is still possible to kill more longs, but accumulation appears to have begun.”
Bitcoin Accumulation Phase
He blamed the selling pressure exerted by the German Government and Mt. Gox buybacks for some of the declines, but added that there was more to it than just those two factors.
He said Bitcoin miners were still in capitulation before adding: “As long as the hash rate does not increase, as seen in a ribbon rally, the local environment is bearish. Miners are selling, which happens every time after the halving.”
The average hash rate is currently around 600 EH/s, down around 18% from its all-time high in May.
About Bitcoin ETFHe said there were “surprisingly consistent inflows. ETFs are buying the dip,” which “suggests an accumulation pattern.”
On July 8, inflows into spot Bitcoin ETFs reached approximately $295 million, the highest level since early June. according to to Farside investors.
He did, however, blame “futures casinos” or “paper Bitcoin” speculators for much of the recent carnage. “The heat map is where you put the fuel, the price is the fire,” he said before adding:
“Price wants to chase higher to clear shorts up to $77,000, but there is plenty of fuel lower too, $47,000 is the next step in the other direction.”
There is still too much speculation and “paper bets”, so it will be difficult for the price to rise in this situation.
These paper bets increased, creating an additional 140,000 paper BTC while the available spot supply remained stable, he said, before concluding: “Now compare that to the 10,000 BTC that Germany sold and you will see what really caused the drop.”
BTC Price Outlook
Woo said the market is in a local bearish environment within a macro bull market, which is a “consolidation and a gift to sat stackers.”
The asset has gained over the past 12 hours but remains flat on the day, trading around $57,483. However, it is down about 9% over the week and 17% over the past month.
The $58,000 level must be broken for BTC to break above resistance again.