Bitcoin (BTC) Price Faces the Threat of Further Drawdown Due to Not Bearishness but Bullishness of the Investors

Bitcoin's (BTC) price has barely recovered from the debacle of momentum witnessed over the last few days.

Bitcoin’s (BTC) price has yet to fully recover from the surprising momentum witnessed over the last few days.

However, the cryptocurrency seems to be facing the threat of further drawdown not due to bearishness but bullishness of the investors.

Bitcoin’s Challenge

Bitcoin’s price fell from $62,000 to $53,300, shocking the crypto market and killing many bullish dreams. The futures market registered long liquidations to the tune of $263 million over three days.

This marks the second-highest liquidation in the last two weeks, with the previous high being noted three months ago in April. Typically, such high liquidations tend to calm investors and make them step back to allow the market to cool.

Yet, BTC holders seem to be suggesting otherwise. The drawdown is said to be facing the impact of Federal Reserve Chair Jerome Powell’s bearish speech earlier this week, which led investors to expect a quick recovery and are prepared to capitalize on it.

Analyst Willy Woo highlighted this in his explanation of the difference between buying futures and buying spot. He denoted that the former results in a bearish environment and stated that this could cause further losses.

According to the Bitcoin Open Value Oscillator, about half a million long contracts are still open in the futures market. Should Bitcoin’s price fall further, these longs could be liquidated. This will lead to an extended bearish period for BTC.

BTC Price Prediction: Validating The Pattern

Bitcoin’s price, trading at $56,961 at the time of writing, is seen stabilizing after it nearly fell to $53,300 yesterday. The cryptocurrency has yet to fulfill the expected 17% drawdown predicted by the double top formation from four months ago.

This prediction targets a drop to $50,900, which will lead to massive long liquidations, as mentioned above. Should BTC fail to hold the $55,000 support, this scenario becomes more likely.

Conversely, if Bitcoin’s price bounces back from $55,000 and flips $58,800 into support once more, a recovery could begin. This would allow a climb to $60,000 to invalidate the bearish thesis.

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