WILLY Woo, a highly-rated cryptocurrency, and digital asset analyst has predicted that the Bitcoin price will likely dip below $6,000 in the short term.
Cryptocurrency Market Continues to Struggle
Since the middle of this month when the Bitcoin price failed to test the $10,000 major support level, the crypto market has been on a downfall.
Most of the smaller tokens and cryptocurrencies have taken a cue from Bitcoin and Ethereum and have recorded even bigger losses during that time frame.
On Friday, May 25, Woo predicted that the price of Bitcoin would most likely fall below the $6,000 mark and will most likely test the $5,500 to $5,700 levels as a long-term support level.
At the moment, the $6,500 mark is seen as an important resistance level which bitcoin has been able to bounce off of since early January.
Woo mentioned four crucial reasons to support his claims and they are;
High NVT signal
Standard NVT overly high
Volume Profile cliff below $6,800
Woo stated that “NVT Signal is still too high. We need more blockchain transactional activity to justify the current price, or the price to drop to reconcile the difference.
“To drive up transactional activity in a bear slide is very unlikely. Volatility is still too high. I’m looking for a sustained low band of volatility which tends to be a signal for the end of the detox and the next accumulation phase. It’s still got some time to ride down.”
The NVT signal is a technical indicator that is used by traders to evaluate the price of Bitcoin which is designed by Woo.
Even though it is highly unlikely that the price of Bitcoin will dip to the $5,000 region, Woo commented that Bitcoin wouldn’t be able to hold on to its current price around the $7,000 region and would fall to the $6,000 region.
Due to the intensity of the dip since late last year, Woo added that this year wouldn’t see a similar correction period as seen in 2014.
He stated that “So, in summary, my best guess… slowish bleed down to $6800… then a steeper slide to $5700, then a leveling out of the drop… then a flat zone. This is an educated guess based on volume profile and fundamental data framing the rate of movement,” added Woo.
The bear market has been in play since the start of the year, with traders blaming various issues like the Mt Gox dumping of Bitcoin into the market, the Upbit investigation in South Korea, tighter regulations of the cryptocurrency space, and manipulation of prices by big investors.