There’s no denying that the cryptocurrency market is suffering, however, its recovery after the massive fall has made it easier for crypto optimists to keep their spirits up. The market cap which was about to hit the 2.5 trillion mark fell short and was at 1.4 trillion at press time. While some were of the opinion that Bitcoin has peaked and that the best course of action is to just cut losses and sell, others held their positions tight.
While the last week of one of the worst months for cryptocurrencies was fairly decent as the market cap went up by 20%. The king coin’s price, too, saw a satisfactory recovery but its sheer volatility kept everyone on the edge of their seats. After all, volatility is the name of the game.
Amid all the price action, market correction, and the fuss regarding the “bubble about to burst” on-chain analyst and trader Willy Woo had a different take on the situation. In a recent podcast, host Peter McCormack pointed out that there’s so much happening in the market. With China’s ban on Bitcoin mining and El Salvador making Bitcoin legal tender, it’s like “two opposite forces at the same time.” On this the analyst said:
“Even that’s bullish, that is great! The whole network got more decentralized, we don’t have 60% miners in China and China can’t take control of the network. Now those concerns of China taking over Bitcoin by a 51% attack are no more. That, plus witnessing something like El Salvador making Bitcoin legal tender, it is like Bitcoin is fighting the final boss in a video game. BTC is up against central banks and it’s happening much earlier than we thought.”
With regard to corrections, a few events led to Bitcoin’s downfall. This ranged from Elon Musk’s Bitcoin energy FUD, China’s mining crackdown, and more recent news about the death cross looming over BTC’s price movements. Reacting to this, Woo drew interesting parallels between Tesla and Bitcoin. He said:
“There was a time when Tesla was the darling of the shorter on the Wall Street and there was fud after fud after hit piece on Elon Musk and Tesla. I feel like that’s what’s happening with Bitcoin right now.”
Looking at BTC’s price it seems like the king coin is still in no man’s land. Its recent attempts at climbing above the $40k mark were thwarted and it dropped after testing that resistance. However, signs of bullish recovery on its one-day chart, as the asset highlighted 11.8% gains in just three days, cannot be ignored. If BTC’s price breaks the 40k resistance a prominent bullish recovery can be expected.
Commenting on the recent sell-offs Woo elucidated that earlier “money was dumped by hedge funds and enterprises into the market” and now it is getting reabsorbed by long-term holders and newer investors. This can also be observed by looking at Bitcoin’s entities net growth which is still high. There is a healthy amount of new users joining the Bitcoin network, something that wasn’t noticeable during previous bear markets.
According to Woo, the market is moving sideways, “it’s bearish at the moment, similar to Wyckoffian accumulation”. The $28-29k was the final test according to the current pattern and the analyst believed that the market was in recovery as on-chain analysis was going bullish.