With Bitcoin surpassing $40,000 once again, market participants started to turn bullish on the short-term outlook for the crypto market.
What Happened: In a recent episode of the Unchained podcast, popular on-chain analyst Willy Woo discussed what Bitcoin’s recent crash and resumed uptick in price meant for the leading cryptocurrency.
According to Woo, Bitcoin’s crash to $30,000 did not indicate the start of a bear market.
However, the sharp correction did affect his year-end price prediction for the digital asset, which was originally as high as $500,000.
[“Bitcoin] was starting to look like it was winding up to $300K, $400K even $500,000 near the end of this year. Now it’s starting to reduce its trajectory. It looks like it’ll comfortably reach $200,000. It might reach $300,000, but we have to see how that develops,” said Woo.
Why It Matters: Woo attributed most of the selloff to Elon Musk’s tweet announcing that Tesla Inc (NASDAQ:TSLA) would no longer accept Bitcoin for payments.
“When that tweet came out, it instigated severe amounts of selling, not only on derivative markets and spot markets,” said Woo.
“We’re now in this situation where Bitcoin is heavily discounted below fundamentals.”
Rafael Schultze-Kraft, CEO of on-chain market intelligence firm Glassnode, also spoke to the fact that according to on-chain data, the overall crypto market structure is still fundamentally strong.
While Kraft agreed with Woo’s reasoning that Bitcoin’s correction was only a correction in the midst of a bull market, he isn’t as optimistic with his year-end price target for the cryptocurrency.
“I still wouldn’t be very surprised if we get another burst of pain, and another kind of, you know, shakeout, before we start regaining the bull market trend,” said Kraft.