Bitcoin price could see more downside, according to on-chain analyst Willy Woo. In a post shared on Monday, Woo said older market models now suggest Bitcoin may find a bottom between $46,000 and $54,000. Woo is author of “The Bitcoin Forecast”, touted as the most popular paid news letter covering the crypto industry.
He explained that this range comes from “old school” on-chain models. These models track how much capital is stored in Bitcoin and how that capital changes over time.
Woo highlighted capital has been leaving the Bitcoin network since November as a result of U.S.-China trade tensions that were high at the time. Because of that, he believes, the market may still be under pressure. As a result, Bitcoin could face more weakness before it finds a clear bottom.
Woo pointed to his Cumulative Value Days Destroyed (CVDD) Floor Model, which now stands near $45,500.
This model looks at Bitcoin’s past market cycles and compares price with the amount of value held in the network over time. It helps identify the price levels where Bitcoin historically received significant support during a weak market environment.
By making this comparison with the broader range of $46,000 to $54,000, Woo said Bitcoin still may not have bottomed out. This means it could go even lower before it begins to rise.
The warning that Woo gave was not only in terms of the prices. He also indicated that there was continued capital outflow from the Bitcoin network.
Simply put, less money is staying in BTC than before. When this trend continues for a long time, it usually points to weak demand and makes a recovery harder. That can leave Bitcoin exposed to deeper losses.
Poor capital trends could extend bear market
Woo also urged traders not to rely too much on market models. He said these models are built on past price action, while Bitcoin has only seen four major bear markets before. He added that all of them happened during a broader bull market in risk assets, including stocks.
Because of that, Woo warned that if this bigger market backdrop weakens, Bitcoin could enter uncharted territory and face a deeper bear phase than in earlier cycles.
The latest post supports Woo’s earlier bearish view from March. Earlier this month, he said Bitcoin was still in a bear market based on long-term liquidity trends.
He also warned that a short-term price rise could become a bull trap. This means Bitcoin could move up for a while, but then fall again.
For now, Woo’s latest view does not confirm that Bitcoin will fall into that range. However, his message is clear. Capital trends still look weak, so traders should be careful about thinking the worst is already over.
Middle East tensions are adding pressure on Bitcoin
The value of Bitcoin and other cryptocurrency assets is still at lower levels compared to the previous week due to the prevailing tensions in the Middle East region. At the time of writing, it was trading at $66,750, up by 0.61 percent in the last 24 hours.
The market capitalization value of Bitcoin is at $1.33 trillion. Meanwhile, the trading volume of Bitcoin in the last 24 hours has increased by 177.93 percent at $38.51 billion.
BTC dropped to $65,000 on Saturday but is now back. However, the value is still not rising significantly. It is still at lower levels compared to the value of around $71,000 in the previous week.
The value of Bitcoin is also down by 48 percent compared to its all-time high value of $126,198, which was recorded last October.