Bitcoin (BTC) Is Down: Is It Time To Buy?

While Bitcoin is edging lower and sellers are relentless, one analyst thinks this is the right time to stack up.

Bitcoin price dropped sharply on July 4 as bears put up a fight at the crucial $60,000 support level. However, one analyst believes this could be the right time to buy BTC. Here’s why.

Bitcoin price is showing signs of weakness once again as the bears attempt to push the coin lower. After a weekend of gains and a promising start to July, BTC dropped by over 5% in the last 24 hours of trading.

With this drop, Bitcoin price sliced through the $60,000 support level like a hot knife through butter. This round number has been closely watched for the past few days, especially following the gains last observed over the weekend.

However, despite the bearish sentiment, one analyst believes that this could be the right time to buy Bitcoin. Here’s a closer look at their analysis and the technicals behind it.

Bitcoin Price Retesting Crucial Support, Could Be Time To Buy BTC

While Bitcoin price is edging lower and the sellers seem relentless, one analyst thinks this is the right time to stack up. In a post on TradingView, the analyst argues that Bitcoin is on the cusp of the “Spring” phase within the Wyckoff re-accumulation model.

The Wyckoff model is a technical analysis tool used by traders and chartists. Traditionally, it uses price and volume patterns to identify potential price movements.

While Wyckoff describes multiple phases when it comes to price patterns, the “Spring” stage is what most traders always track. When prices “spring” higher from this stage, the coin tends to break out from the current range at the back of rising trading volume.

Looking at the Bitcoin daily chart, it is evident that prices have been consolidating. Thus far, the primary support is around the May and June 2024 lows.

Then, prices broke lower, sinking below $57,000 and bottoming at around $56,500 in May. Resistance lies between $72,000 and March 2024 highs on the upper end.

As it is, Bitcoin is retesting the primary support, with the July 4 bar piercing $60,000 and dropping to as low as $56,900 earlier today. Based on the Wyckoff model, prices are priming for the spring phase. This preview will hold, especially if there is no confirmation of today’s losses.

Bitcoin Hash Ribbons Show Miner Capitulation Driving Sell-Off

The post also includes the Bitcoin Hash Ribbons, a technical indicator used to gauge miner behavior. According to on-chain analyst Willy Woo, the indicator is signaling miner capitulation.

The Hash Ribbons are a moving average of the 30-day and 60-day hash rate, used to determine whether miners are adding or removing hash rate from the network. When the 30-day average crosses above the 60-day average, it signals that miners are adding hash rate to the network. Conversely, when the 30-day average crosses below the 60-day average, it signals that miners are removing hash rate from the network.

According to Woo, the indicator is showing that the sell-off is being driven by miner capitulation, which could be a sign that the bear market is coming to an end.

“Zoom out. This sell-off is miner capitulation. Hash Ribbons just dropped. We’re early.”

Woo’s analysis suggests that the sell-off is a result of miners selling their Bitcoin holdings to cover their costs. This is common during bear markets, as miners’ revenue decreases due to the lower Bitcoin price. As a result, miners are forced to sell their Bitcoin holdings to stay afloat.

However, Woo’s analysis also suggests that the sell-off could be coming to an end. This is because the Hash Ribbons are indicating that miners are now removing hash rate from the network. This could be a sign that miners are no longer able to operate profitably and are shutting down their mining rigs.

If Woo’s analysis is correct, then the sell-off could soon be over and Bitcoin price may begin to recover.