Analyst Predicts Bitcoin to Hit $47k as Mt. Gox Unloads
Andrew Throuvalas
Last updated:
July 5, 2024, 13:12 EDT
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1 min read
Bitcoin’s price is on a downward trend, reaching its lowest point since late February. An on-chain analyst anticipates a further 16% decline to $47,000 as the next bottom for the primary cryptocurrency.
When Will Bitcoin Reach its Lowest Point?
According to CryptoQuant writer Adel Axel Jr., $47,000 represents a 25% discount from the average buying price of short-term Bitcoin holders. This estimation is based on the average price at which all coins were transferred within the previous thirty days, as shown on the blockchain.
As per LookIntoBitcoin, the realized price for short-term holders was $64,614 as of Wednesday.
“This is likely to be a strong support level and a test for new buyers,” Axel stated on Thursday. “Historically, natural corrections in the bull market have lasted between 110 to 60 days.”
On-chain analysis suggests that this price level often triggers panic selling among new market participants when their investments start to incur losses.
Axel also pointed out the $46,300 price mark – the average entry price for buyers in the last year. CryptoQuant data indicates that over $2.3 billion worth of coins moved on-chain on Thursday were last moved this year, while older coins experienced a lesser sell-off.
Currently, Bitcoin is trading at $56,374 as of Friday, showing a 20.73% decline over the last month.
An Anticipated Correction
Many analysts believe that Bitcoin’s recent pullback was expected. This week marks the first instance since late 2022 that Bitcoin has dropped over 20% from its recent highs, now down by 23.58% from its all-time peak of $73,700 in March.
In comparison, Bitcoin underwent multiple corrections of 20% to 30% while continuously reaching new highs in 2017. In March 2020, the cryptocurrency experienced a 60% correction amidst panic related to Covid-19 before skyrocketing almost 20 times in the following 13 months.
The current Bitcoin market seems to be affected by a different kind of panic: the bankrupt Bitcoin exchange Mt. Gox announced on Friday that it had started repaying customers their long-lost Bitcoin, with 138,985 BTC ($7.52B) still remaining.
However, Axel from CryptoQuant believes that true panic has not yet set in, hinting at more volatility in the near future.
“In the current scenario, $47k doesn’t seem as daunting as it did three weeks ago when we were at $70k,” he remarked on Friday. “We require more consolidation, but at a slower pace.”
