What Caused Bitcoin’s Price Plunge and What’s Next As BTC Bounces Above $61,000

The price of Bitcoin has been on a rollercoaster for the past few days, resulting in hundreds of millions of liquidations worldwide.

Traders and analysts are now speculating about what’s next, with Willy Woo giving some insight into BTC’s short-term price targets.

BTC bounces back above $61,000

The price of BTC fell yesterday, falling to a low not seen since early May.

As seen in the chart below, the cryptocurrency fell to around $58,400 before staging a recovery.

Source: TradingView

This spike in volatility led to many liquidations in the futures market. Their number reached $360 million in the last 24 hours, with the vast majority of them long positions, as expected.

According to data from Coinglass, around $280 million of the settlements were long.

Willy Woo, a well-known advocate and crypto veteran, provided an analysis of what happened and what the next steps should be for BTC.

What’s Next for the Bitcoin Price?

According to Willy Woo, yesterday’s move was largely caused by the long liquidation cascade in the futures market.

he argued that the main initial target for deleveraging was $62.5K, but then speculators continued to add new long positions, “only adding more fuel for more liquidations in a cascading long squeeze.”

An additional factor for the accident was the capitulation of the miners:

Superimposed on this liquidaiton pressure, we have a subsequent capitulation of half of the miners. Miners are in a BTC sale to pay for hardware upgrades because old hardware is no longer profitable. Weaker miners are closing up shop and being liquidated. said Woo.

Woo predicted that short-term technical factors point to a reversal, and that seems to be what happened: BTC price rebounded to around $61,000.

Source: Willy Woo, X

However, the analyst cautioned that “BTC is not out of the woods.” According to him, it is important to monitor how much of the speculation (read: leveraged positions) was removed from the system.

Without removing open interest from futures, the system is not ready to go up.

In this regard, data shows that less than 3% of BTC open interest has been cleared in the last 24 hours.

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