Bitcoin: “Prepare for some very boring price action for many more weeks”

• Bitcoin’s recent price recovery is technical, not fundamental, according to analyst Willy Woo.
• Despite a temporary rise in prices, underlying market weaknesses and speculative pressures persist.

Despite a recent surge that Bitcoin saw [BTC] Momentarily reaching the $62k mark, the largest cryptocurrency by market cap continued to struggle under bearish pressures.

After reaching a high of over $73,000 in March, Bitcoin has since declined by almost 20%, trading below $61,000 and recent fluctuations have reached as low as $60,606 at press time.

This decline comes amid broader market challenges and reflects a significant pullback from previous gains, suggesting underlying weaknesses in market fundamentals.

Evaluating the recent Bitcoin price surge

Cryptocurrency analyst Willy Woo has recently offered insights on BTC volatility, suggesting that while recent price corrections have alleviated some excessive market leverage, a full recovery is far from imminent.

According to Woo, the market still harbors a speculative excess that needs to be addressed to stabilize prices.

The recent rally to $62,000, as Woo noted, is more of a technical bounce than a fundamental recovery, indicating that deeper issues still plague the Bitcoin market.

Willy Woo described the latest surge in Bitcoin price as a technical rally, attributing it to automatic responses within trading algorithms rather than a genuine increase in buyer demand.

He pointed out specific patterns, such as the TD9 reversal and hidden bullish divergence, that suggest a short-term recovery but do not necessarily indicate long-term health.

Woo said,

“So far, this technical change is occurring.”

However, Woo emphasized that this rally does not reflect underlying fundamental strength.

The market is simply correcting from its previous oversold condition, without any significant change in the actual supply and demand dynamics of Bitcoin.

For a true bullish reversal in fundamentals to occur, there needs to be an increase in spot buyers purchasing coins directly on exchanges, a trend that is not pronounced enough at the moment.

Woo also noted that,

“We are still waiting for the hash rate to pick up, which is a major sign that miners have stopped selling to fund hardware upgrades.”

He concluded,

“So get ready for some very boring price action for many more weeks. It’s not moon boy time. It’s time for speculators to liquidate, or until they get bored and close positions. Then we can move on. The best way here is to accumulate points and let the degens die.”

Insights from market data

Further compounding the bearish outlook was data on Bitcoin open interest and trading volumes.

Analysis of Coinglass data by AMBCrypto revealed a sharp 2.16% decline in open interest and a 25% drop in open interest volume over the past day, indicating reduced trading activity and possibly a higher low speculative interest.

Such declines may suggest that traders are less willing to take positions in Bitcoin, anticipating possible further declines in its price.

Additionally, the MVRV ratio, which compares Bitcoin’s market value to its realized value, was 1.98 at press time. This helps indicate whether Bitcoin is undervalued or overvalued compared to its historical price norms.

An MVRV ratio below 2 generally suggests that Bitcoin is undervalued, which could imply that the price may have room to grow if market sentiments change.

Read Bitcoin [BTC] Price prediction 2024-25

However, given current market conditions and broader economic uncertainties, this growth potential should be viewed with caution.

Despite the bearish trends, some optimistic forecasts persist, such as predictions reported by AMBCrypto that they foresee a rise to $250k based on Bitcoin’s rainbow chart.

This is an automatic translation of our English version.