Bitcoin Price Dropped With These 3 Developments: What’s Next?

The price of Bitcoin (BTC), the world’s largest cryptocurrency, fell below the critical support level of $60,000 to $59,000 earlier today, but later rebounded above this level. Prominent cryptocurrency analyst Willy Woo explained that the recent Bitcoin price correction helped clear much leverage in the market, but the correction process is not complete yet. Here are the details…

Long positions were effective for the Bitcoin price

Monday, June 24 at Mt. Following the Gox Bitcoin refund announcement, the Bitcoin price dropped even further. Woo noted that the market has begun to clear much leverage, disabling the first target at $62,500. In contrast, speculators continued to add new long positions, leading to further liquidations in a gradual long squeeze. This caused the Bitcoin price to drop to $58,000 earlier today.

Woo points out that, in addition to the liquidation squeeze, the post-halving Bitcoin miner capitulation effect is still ongoing. As Kriptokoin.com reported, as mining difficulty increased significantly, Bitcoin miners were selling heavily to fund hardware upgrades. This forced the weakest miners to close shop, leading to liquidation.

There is an expectation of 54,000 for BTC in the short term

Woo said that technical indicators indicate that the Bitcoin price will reverse. Acting according to Woo’s claims, Bitcoin has rebounded from low levels below $59,000 and is currently trading at $61,500. However, the analyst warned that Bitcoin is not entirely safe now. Don’t realize now how much speculative excess the market has cleared so far. Without a significant reduction in BTC futures positions, the Bitcoin price will not sustainably rise.

Woo believes Bitcoin could hit new lows and the next critical level will be $54,000, where another wave of liquidations will occur. A drop to this level would push BTC below the price point of short-term investors, thus typically entering a bear market. Woo also emphasized that this level serves as a critical boundary between bullish and bearish market regimes, and that falling below this level will be critical considering the current macro setup.

Factors shaping the future of Bitcoin

According to Ki Young Ju, Founder and CEO of CryptoQuant, Bitcoin’s price is currently shaped by three main buying liquidity channels: fiat currencies, stablecoins and exchange-based ETFs. These factors influence the market trend and affect the cryptocurrency price until June. Current statistics show that the stablecoin market cap is rising but is still relatively close to previous ATHs compared to the BTC market cap. Market analyst Ki Young Ju said that the stablecoin exchange reserve ratio is also quite similar to these ATH levels.

This suggests that stablecoins are primarily used for buying liquidity, and further large price movements may require more stablecoin inflows to spark another major rally. At the same time, the Coinbase premium has been negative over the past week, which can be attributed to the general market sentiment and the lack of strong fiat inflows to push the Bitcoin price higher.