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Analysts contend that on-chain indices are clearly too bullish to allow for a deeper price drop, and that Bitcoin will continue to be a trillion-dollar currency.
According to experts, Bitcoin (BTC) is seeing a flood of new consumer adoption as a backdrop to rates potentially bottoming out at about $52,000.
In a series of tweets on April 20, statistician Willy Woo led calls for caution in the wake of Bitcoin’s latest price drop and eventual remaining $9,000 drop from all-time highs.
$1 trillion cap has created new “line in the sand”
Woo reiterated previous claims, claiming that buyer support had strongly founded Bitcoin as a trillion-dollar commodity and that BTC/USD need not sink far below the comparable spot price — about $53,000 — to sustain it.
“This revisit of lower price has created incredibly strong price validation for Bitcoin about $1T cap. 14% of the supply last moved above $1T cap,” he wrote.
“This is a key line in the sand imprinted into BTC’s price discovery, an area of immense support.”
Woo also highlighted the continued transfer of coins from weak hands to strong, along with a surge in new users entering the space.
For fellow analyst William Clemente, this “hockey stick” shape of new adoption was of essential significance.
“This is the most important post of this thread by far,” he replied to Woo, who noted that technical traders had been far more bearish on Bitcoin despite the strength of on-chain indicators.
JPMorgan turns bearish on BTC… again
Among them was JPMorgan’s Nikolaos Panigirtzoglou, who claimed in a recent note that this price drop would not entice investors as it had in the past.
He noted that the unwinding of futures positions would not be reversed, and that overall interest in retail Bitcoin betting would now diminish.
“Over the past few days Bitcoin futures markets experienced a steep liquidation in a similar fashion to the middle of last February, middle of last January or the end of last November,” Bloomberg quoted the note as stating.
“Momentum signals will naturally decay from here for several months, given their still elevated level.”
BTC/USD was still undecided on its short-term direction at the time of publication, sticking to $55,000 as signs of life returned to some altcoins.
Dogecoin (DOGE) was down 18 percent on Wednesday after “Dogecoin Day” — an effort to raise the price to $4.20 — fell flat on its face.
DOGE/USD is now up 160 percent in a week.