Crypto

Bitcoin risks a huge drop

The world’s largest cryptocurrency Bitcoin (BTC) is currently trading sideways after failing to hold above the $40,000 levels. At the time of writing, Bitcoin (BTC) is trading at $35,274, down 7.5% with a market cap of $658 billion.

Bitcoin indicators and on-chain metrics are dangerous at this point and are giving analysts a hard time. Popular Bitcoin analyst Willy Woo looks at the macroeconomic situation to analyze the current situation. Willy Woo predicts selling pressure on Bitcoin rather than any bullish momentum next week.

He states that a lot of money is flowing into the US Dollar Index (USD) at the moment, which means that the money has been moved to a safe place. Therefore, Willy Woo points out that if the stock market corrects further, Bitcoin (BTC) will also enter a strong price correction. In his final analysis, Willy Woo wrote:

My only concern for the downside risk is that we get a major correction in equities that will push the Bitcoin (BTC) price down regardless of the on-chain fundamentals. Noticing USD strength in DXY shows some traders are moving safely in USD

We Are Not In A Bear Market

The recent price action in BTC has investors worried, with some pointing out that this is the start of a new bear market cycle. Woo denies such a case, citing the healthy growth of new users joining the Bitcoin network.

Source: Glassnode

Willy Woo also points out that money is starting to flow back from stablecoin to Bitcoin (BTC). He also states that Bitcoins are moving from weak hands to strong hands. As we reported earlier, short-term holders (STHs) entering the market in the last 1-6 months are taking a loss, but whales and long-term users are accumulating at every stage.

In the chart below, Woo states that the foreign exchange flow has accelerated excessively in the past month.

bitcoin
Source: Willy Woo

While Willy Woo reports that analysts are looking for a “wait and see” approach, he also suggests that some time must pass.

How much is bitcoin now?

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