Bitcoin prices could potentially drop to around $47,000 in this market correction, according to technical analyst Willy Woo.

That scenario would result in an overall retrace of 36%, which is also not unheard of in bull market cycles.

On July 8, Woo posted a market overview to his 1.1 million followers on X, concluding that markets had entered a macro consolidation phase but had not ruled out further drops.

“It’s a deep consolidation designed to shit your pants and to liquidate traders into max pain. $47k still possible to kill more longs, but accumulation looks to have started.”

Bitcoin Accumulation Phase

He blamed selling pressure from the German government and Mt. Gox redemptions for some of the declines but added that there was more to it than those two factors.

He said Bitcoin miners were still in capitulation before adding, “Until the hash rate climbs, as seen in a ribbon recovery, the local environment is bearish. Miners are selling off, which happens every time after the halving.”

The average hash rate is currently around 600 EH/s, down around 18% from its May all-time high.

Market overview of the current state of #Bitcoin demand and supply.

– miners ⛏️
– German govt 🤡
– ETFs 🏦
– Futures 🎲🎰

Punctuated in emojis for ELI5ers.

🧵

— Willy Woo (@woonomic) July 8, 2024

On the subject of Bitcoin ETFs, he said there were “Surprisingly it’s steady inflows. ETFs are buying the dip,” which is “suggestive of an accumulation pattern.”

July 8 saw around $295 million in spot Bitcoin ETF inflows, its highest level since early June, according to Farside Investors.

However, he blamed the “futures casino” or speculative “paper Bitcoin” traders for a lot of the recent carnage. “The heatmap is where fuel is laid, the price is the fire,” he said before adding,”

“Price wants to hunt higher to take out the shorts all the way to $77k, but also there’s lots of fuel lower, $47k is the next stop in the other direction.”

There is still too much speculation and “paper bets,” so it will be difficult for the price to climb in this situation.

These paper bets have been rising creating 140,000 extra paper BTC while available spot supply has remained flat, he said before concluding “Now compare that to 10,000 BTC that Germany sold and you see what really caused the dump.”

BTC Price Outlook

Woo said the market was in a local bearish environment inside of a macro bull market, which is a “consolidation and a gift to sat stackers.”

The asset has gained over the past 12 hours but remains flat on the day trading around $57,483. However, it is down roughly 9% on the week and 17% over the past month.

The $58,000 level needs to be broken for BTC to move above resistance again.