Bitcoin Price Declines Analyst Attributes it to Speculation and Miner Squeeze
Bitcoin’s price has experienced a significant drop recently, leaving investors puzzled. However, according to experts such as Willy Woo, this decline can be attributed to a combination of risky bets and changes among Bitcoin miners after the halving.
Woo suggests that the fall in Bitcoin’s price was driven by speculators who continuously opened new long positions. This led to a cascading long squeeze, ultimately pushing the price below $60,000. Additionally, Bitcoin miners have contributed to the downward pressure on the price. Since the halving, which reduced the block reward to 3.125 BTC, miners’ revenue has decreased. To cover their expenses, miners have been selling more Bitcoin than before, further influencing market dynamics.
As of June 27, 2024, Bitcoin’s price stands at $60,720. It has experienced a 1.6% decrease in the past 24 hours, a 7.5% decrease over the past week, and a 10.8% decrease in the past 30 days. The highest price this month was $71,103 on June 5, but since then, Bitcoin’s price has been on a downward trend. At the beginning of the year, on January 1, Bitcoin was valued at around $44,193. It reached its peak at over $73,000 on March 13, marking the highest point of the year.
The most significant price movement of the year occurred between January 23 and March 13, when Bitcoin surged from under $40,000 to over $73,000. However, this month has seen a sharp decline from June 6 to June 24, with the price dropping from over $70,000 to below $60,500.
Bitcoin’s halving on April 19, 2024, saw it close at $63,824. Despite initial gains, prices quickly retreated to $58,251 by May 1, only to briefly recover above $71,000 by May 20 before entering a new downward phase in early June.
Despite the challenges, Willy Woo remains cautiously optimistic. He believes that the current phase is a necessary adjustment period, especially for weaker miners. Before a sustainable rally can occur, Woo suggests that the market needs to address excessive futures open interest and potentially aim for a critical liquidation level near $54,000.
In summary, Bitcoin’s recent price fluctuations can be attributed to a combination of speculative trading and miner adjustments after the halving. While the outlook remains cautious, analysts like Willy Woo see the potential for recovery, depending on Bitcoin’s ability to navigate current challenges and meet market conditions for sustained growth.