- Bitcoin and friends have almost fully recovered from the early July struggles, with spot Ether ETFs approved and the worst of the sell-off storm weathered.
- Analyst Willy Woo also notes that miner capitulation is nearing an end, which will alleviate even more downward pressure on BTC’s price.
- It’s not all roses for the coin though, as exchange inventory trends upward and investors consider re-allocating assets to spot Ether ETFs.
The crypto market has entered an interesting phase. We’ve seen the lows of mass supply entering the market thanks to the German State Government sell-off and the Mt. Gox repayments.
But we’ve also seen the resilience of the sector, with investors pushing back against the BTC floor of US $50k (AU $75k). Most major blockchain tokens have recovered 15%+ since the troughs of early July. So, where to from here?
Prominent social media analyst Willy Woo has a few ideas.
Related: Bitcoin Buying Spree: UK Football Club and Japanese Metaplanet Load up on BTC
Bitcoin Miner Capitulation Coming to an End
A big story of June was that of miner capitulation. Miner capitulation occurs when the price of BTC shrinks while the difficulty of validating new blocks increases, causing a squeeze on the practice’s profitability. Capitulations aren’t necessarily a long-term bearish signal and often correlate with the months following a Bitcoin halving event.
However, as miners lose profitability, many end up selling a portion of their tokens to maintain liquidity in a fast-moving environment. The result is added sales pressure on the price of Bitcoin.
But according to Willy Woo, miner capitulation is coming to an end, with the average daily profit of BTC miners closing in upon the annual daily average. This is “one of the most reliable bullish indicators”.
On top of this, global liquidity is an enormous macro trend that correlates with most major markets – and crypto is no exception, especially with the entrance of TradFi and Bitcoin/Ether ETFs.
Global liquidity, aka how much money is available to investors, has been steady since 2021 and, according to Willy Woo, is set up to explode over the coming years.
Token Sales Continue as Supply vs Demand Reaches Breaking Point
As always, not every signal can be bullish.
We touched upon it earlier in the article, but even the most positive Bitcoin investors have acknowledged the impact of increased sales pressure.
With the German State of Saxony and Mt. Gox combining to sell billions worth of BTC, exchange inventory is trending up for the first time since mid-2023.
It’s also worth noting that spot Ether ETFs are going live in the US over the next 24 hours. Although this is a good omen for the industry as a whole, it may cause some short-term instability as investors reallocate portfolios away from BTC and into Ether.
Related: Uni of Queensland Highlights Need for Education on Crypto Scams
Ultimately, the bull and bear battle is dead even, and the price of most tokens has ranged within 5% over the past week.
But Willy Woo believes eventually the bulls will prevail.
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