- Bitcoin’s recent price recovery is technical and not fundamental, according to analyst Willy Woo.
- Despite a temporary price increase, underlying market weaknesses and speculative pressures remain.
Despite a recent spike in Bitcoin [BTC] currently hitting the $62,000 mark, the largest cryptocurrency by market cap continued to struggle under bearish pressure.
After reaching a high of over $73,000 in March, Bitcoin has since fallen nearly 20% and is trading below $61,000, with recent swings as low as $60,606 at the time of writing.
This decline comes amid broader market challenges and reflects a significant pullback from previous gains, signaling underlying weaknesses in market fundamentals.
Assessing Bitcoin’s Recent Price Rise
Crypto analyst Willy Woo recently made a bid insights in BTC volatility, suggesting that while recent price corrections have alleviated some of the market’s overleverage, a full recovery is far from imminent.
According to Woo, the market still harbors a speculative surplus that needs to be addressed to stabilize prices.
The recent surge to $62,000 is, as Woo noted, more of a technical recovery than a fundamental recovery, indicating that deeper problems are still plaguing the Bitcoin market.
Willy Woo described Bitcoin’s latest price rise as a technical recovery, attributing it to automatic responses within trading algorithms rather than a real increase in buyer demand.
He pointed to specific patterns, such as the TD9 reversal and hidden bullish divergence, that point to short-term recovery but do not necessarily indicate long-term health.
Woo stated,
“So far, this technical reversal is visible.”
Source: X/Willy Woo
However, Woo emphasized that this recovery does not reflect an underlying fundamental strength.
The market is merely correcting from its previous oversold state, without any significant change in Bitcoin’s actual supply and demand dynamics.
A true bullish reversal in fundamentals will require an increase in spot buyers purchasing coins directly on exchanges, a trend that is currently not sufficiently pronounced.
Woo also noted that,
“We are still waiting for the hash rate to recover, which is an important sign that miners have stopped selling to finance hardware upgrades.”
He concluded,
“So be prepared for very boring price action that will last for many weeks. It’s not moon boy time. It’s time for speculators to liquidate themselves, or until they get bored and close positions. Then we can continue. The best way here is to stack the spot and let swords die.
Insights from market data
The bearish outlook was further reinforced by Bitcoin open interest and trading volume data.
AMBCrypto’s analysis of Coinglass’ facts revealed a sharp 2.16% drop in Open Interest volume and a 25% drop in Open Interest volume over the past day, indicating reduced trading activity and possibly lower levels of speculative interest.
Source: Coinglass
Such declines may indicate that traders are less willing to take positions in Bitcoin in anticipation of possible further price declines.
Furthermore, 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 historical price norms.
Source: CryptoQuant
An MVRV ratio of less than 2 generally indicates that Bitcoin is undervalued, which could imply that the price could have room to grow if market sentiment changes.
Read Bitcoin’s [BTC] Price forecast 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 predictions remain, such as AMBCrypto’s predictions expect an increase to $250,000 based on the Bitcoin rainbow chart.