Survival of the Fittest: Here’s How Bitcoin’s Next Rally Hangs on Miner Capitulation
21 Junio 2024 - 1:30PM
NEWSBTC
Amidst a backdrop of declining Bitcoin prices and economic
uncertainty, renowned crypto analyst Willy Woo has offered a
forecast that suggests a complex road ahead for BTC, with potential
gains on the horizon after some ‘inevitable’ turbulence. Bitcoin
Rally Hangs On Miner Capitulation, How? Bitcoin’s current market
behavior is largely influenced by its miners, whose actions can
significantly impact its price. According to Willy Woo, the key to
understanding when Bitcoin might start its recovery lies in
observing miner capitulation and the subsequent recovery of the
hash rate. Related Reading: Bitcoin And Solana Brace For Quiet Q3:
What Crypto Traders Should Know Miner capitulation occurs when less
efficient miners, unable to sustain profitability, are forced to
sell their holdings and exit the market. This phase is critical as
it typically decreases selling pressure, allowing for market
consolidation and setting the stage for potential price increases.
Woo points out that this cycle is not a quick one. Historical data
from previous Halving events, which reduce the reward for mining
Bitcoin, show that recovery can take time. I’ll break it down in
simple terms. When does #Bitcoin recover? It’s when weak miners die
and hash rate recovers. This one is for the record books as it’s
taking a lot of time for miner capitulation post-halving. Probably
can thank ordinal inscriptions boosting profits.
pic.twitter.com/19MB0b8mHO — Willy Woo (@woonomic) June 20, 2024
The current cycle appears prolonged, with miners taking longer than
usual to capitulate due to the profitability provided by new market
mechanisms like ordinal inscriptions. This extended adjustment
period might be difficult for investors, but it is a necessary step
toward achieving a healthier market. Key Indicators to Watch: Hash
Ribbons and Market Signals Willy Woo emphasizes the importance of
monitoring Bitcoin’s hash ribbons. This indicator provides insights
into the economic viability of Bitcoin mining. Related Reading:
Bitcoin Miners’ Reserves Deplete Amidst High OTC Selling, What This
Means A reduction in hash ribbons suggests that the cost of mining
is becoming more aligned with the market price of Bitcoin,
signaling that the worst of the sell-off may be over and a recovery
could be forthcoming. In addition to hash ribbons, Woo advises
investors to keep an eye on broader market signals. Here’s a view
of just how much paper bets on #Bitcoin there is right now. The
solid yellow chart is a z-score oscillator looking at how
significant it is locally. We need a solid amount of liquidations
still before we get the all clear for further bullish activity.
https://t.co/tswxQwxlc1 pic.twitter.com/TwGG5tf50z — Willy Woo
(@woonomic) June 19, 2024 For instance, the current speculative
environment in Bitcoin, marked by a high volume of theoretical
trading, requires a series of liquidations to achieve market
balance. This clean-up phase, although painful, is essential for
setting a solid foundation for the next bull run. The analyst
noted: I know it sucks, but BTC is not going to break all time
highs until more pain and boredom plays out. On the bright side,
miners are capitulating and when that is through, it nearly always
ends in a huge rally. Look for compressions in this ribbon. Buy and
hodl in these regions. Featured image from DALL-E, Chart from
TradingView
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