Analyst Targets $47,000 as Bitcoin’s Next Support Level Post Mt. Gox Sell-off
Andrew Throuvalas
Last updated:
July 5, 2024, 13:12 EDT
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1 min read
Billions in Bitcoin Moved by Mt. Gox – Top Altcoins to Consider Amid Potential Crypto Market Dip / Source: Cryptonews
Bitcoin’s value has recently plunged to its lowest point since late February, prompting an on-chain analyst to forecast a further 16% decline to $47,000 as the cryptocurrency’s next potential floor.
When Will Bitcoin Bottom Out?
This week, CryptoQuant’s Adel Axel Jr. projected that $47,000 represents a 25% markdown from the average acquisition price of short-term Bitcoin investors. This estimate is based on the average price at which all coins were transferred within the last thirty days, as evidenced by blockchain data.
According to LookIntoBitcoin, the realized price among short-term holders stood at $64,614 as of Wednesday.
“This level could serve as a pivotal support and a test for new market entrants,” Axel noted on Thursday. “Historically, natural corrections during bullish phases have lasted from 110 to 60 days.”
Analysis of on-chain data suggests that this price point often triggers capitulation among recent market participants, who tend to panic-sell when faced with negative returns.
Axel also highlighted the $46,300 threshold – the average entry price for investors over the past year.
CryptoQuant’s data reveals that on Thursday alone, over $2.3 billion worth of coins, last moved this year, were transacted on-chain, whereas older coins experienced a less pronounced sell-off.
As of Friday, Bitcoin is exchanging hands at $56,374, reflecting a decline of 20.73% over the past month.
A Long-Awaited Correction
Numerous analysts argue that Bitcoin’s recent decline was overdue. This marks the first instance since late 2022 that Bitcoin has retraced more than 20% from its recent highs, now down by 23.58% from its peak of $73,700 in March.
In contrast, during 2017, Bitcoin underwent multiple pullbacks ranging from 20% to 30% while consistently reaching new highs.
In March 2020, amidst Covid-19-induced panic, the cryptocurrency experienced a 60% correction before rebounding nearly twentyfold over the subsequent thirteen months.
The present Bitcoin market appears to be grappling with a new form of anxiety: on Friday, insolvent Bitcoin exchange Mt. Gox announced the commencement of reimbursements to customers for their long-lost Bitcoin, with 138,985 BTC ($7.52 billion) yet to be returned.
Nonetheless, CryptoQuant’s Axel suggests that genuine “panic” has not yet materialized, implying further volatility lies ahead.
“In the current scenario, $47,000 doesn’t appear as daunting as it did three weeks ago when we were at $70,000,” he observed on Friday. “We anticipate further shakeouts, albeit at a slower pace.”
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