Bitcoin is quickly selling off. On spot rates, the world’s most valuable currency is down more than 5% in its last trading day and continues to spiral downward, easily breaking $60,000. The round psychological number has been one to watch in recent days, especially after the weekend’s gains.
Bitcoin has fallen: is it time to buy?
Although Bitcoin is falling and sellers are relentless, one analyst thinks now is the right time to move higher. In a post on X, the analyst argues that Bitcoin is on the verge of the “Spring” phase within the Wyckoff reaccumulation model.
![Bitcoin’s Crash: Is This the Best Time to Buy BTC? 1 Bitcoin May Be Preparing to Surge Higher | Source: @el_crypto_prof via X](https://thegurumedia.com/wp-content/uploads/2024/07/GRodZAYbMAEB8gG.jpg)
The Wyckoff model is a technical analysis tool used by traders and chartists. It traditionally uses price and volume patterns to identify potential price movements.
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Although Wyckoff describes multiple phases when it comes to price patterns, the “Spring” stage is the one that most traders always follow. When prices “spring up” from this stage, the currency tends to break out of the current range due to increased trading volume.
Looking at Bitcoin’s daily chart, it’s clear that prices have been consolidating. So far, primary support has been near the May and June 2024 lows. Prices then turned lower, dropping below $57,000 and bottoming out around $56,500 in May. Resistance lies between $72,000 and the March 2024 highs on the upper side.
As it stands, Bitcoin is retesting primary support, with the July 4 bar piercing $60,000 and falling to $56,900 earlier today. Based on the Wyckoff model, prices are gearing up for a spring phase. This preview will hold, especially if there is no confirmation of today’s losses.
Miner capitulating even though long-term holders are not selling
While the analyst is optimistic, not everyone is. According to Willy Woo, an analyst at the network, the current sell-off is mainly directed by miner capitulation. Looking at the Bitcoin Hash Ribbons, the decline appears to be starting as the market weeds out “weak” miners.
Since April 20th Reduce by halfthe Bitcoin network automatically halved BTC rewards to 3,125 BTC. This automated move further increased the pressure on miners, who must invest capital to purchase equipment and operate efficiently. With revenues falling, only the most efficient miners have the opportunity to operate profitably.
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As a result, those who are unable to upgrade their equipment are forced out of the picture. Otherwise, they will continue to operate without the chance to earn block rewards consistently. Over the past eight months, on-chain data show that miners have been unloading BTC, bucking the Q1 2024 uptrend and worsening the April correction.
![Bitcoin’s Crash: Is This the Best Time to Buy BTC? 3 BTC Liquid Supply | Source: @Plamen__Andonov via X](https://thegurumedia.com/wp-content/uploads/2024/07/GRoQTX9XgAAc0sq.jpg)
Amidst this, long-term holders, mainly institutions and whales, stopped selling in mid-January 2024. Then, the US Securities and Exchange Commission (SEC) approved the first round of Bitcoin exchange-traded funds (ETFs).
As evidence, Bitcoin’s “illiquid supply,” which shows the number of coins that haven’t moved in more than two years, is near an all-time high.
Featured image by DALLE, chart by TradingView