Although Bitcoin has regained the $56,000 price level in the past few hours sudden drop below $54,000 on July 5, has reminded investors of the intense volatility connected to the market. In the larger time frame, Bitcoin is down 7% and 20.25% over the last seven and thirty days, respectively.
While many crypto traders and analysts are still in the long-term spirit of a bullish cycle, the sudden price drop was not surprising to some. Notably, crypto trader @TheFlowHorse revealed that the drop to $53,000 resonated with his $52,000 target. Similarly, Ki Young Ju, CEO of CryptoQuant, noted the possibility of Bitcoin falling to $47,000.
Bitcoin could crash to $47,000
According to Ki Young Ju, Bitcoin is still in a bull market in the larger time frame, which will continue until early 2025. This line of thinking resonates with many other price prospects for Bitcoin, especially over the long term. Despite this bullish projection, market participants are currently facing bearish near-term conditions.
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As Ki Young Ju noted, this uncertainty opens up the possibility that the world’s leading digital currency will plummet to a hair-raising $47,000 before getting back on track. With the crypto market in a prolonged slump since early June, this bearish case scenario seems increasingly likely. Bitcoin in particular has lost billions in value and investor confidence is wavering.
$112,000 at the peak of the cycle.https://t.co/beKpUVkNXL pic.twitter.com/Esj02BYms4
— Ki Jonge Ju (@ki_young_ju) July 5, 2024
Young Ju warns traders against opening highly leveraged long or short positions based on his bullish long-term projections due to the prevailing uncertainty. When asked what his long-term price target for Bitcoin was, he responded noted an increase to $112,000 at the peak of the cycle. This prediction is based on the market capitalization achieved by BTC since July 2010.
Bearish case for Bitcoin
At the time of writing, Bitcoin is trading at $56,520 and has recovered 4.67% since its recent drop below $54,000. However, despite this price recovery, the crypto is at significant risk of falling further amid the whale sell-off, which has raised more than $1.7 billion worth of BTC in the last 30 days. The defunct crypto exchange Mt. Gox is too begins to pay back his creditors in BTC after 10 years of inactivity. This is expected to release a supply of Bitcoin worth $2.71 billion to the market, perhaps increasing selling pressure.
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A reversal to the downside is not yet out of the books. If Bitcoin were to fall to $47,000, it would represent a 16% decline from the current price level. Market participants continue to wait for Bitcoin’s price action takes place in July, historically a positive month.
Featured image created with Dall.E, chart from Tradingview.com