Bitcoin (BTC) Correction to $39,000 Likely, According to On-Chain Analyst Willy Woo – Here’s Why

On-chain analyst Willy Woo says he’s anticipating Bitcoin (BTC) will retest the $39,000 zone before any potential bullish continuation.

Woo tells his one million followers on the social media platform X that Bitcoin has a gap near $39,700 on the Chicago Mercantile Exchange (CME) futures market.

Trading gaps happen when an asset’s price opens significantly higher than the last closing price, typically over the weekend in traditional finance markets. Traditionally, gaps are often expected – though not guaranteed – to be filled due to the lack of liquidity in that particular price zone.

Woo also notes that there is another unfilled gap near $20,000.

“The Bitcoin CME Gap at $39,700…

By my count 28 out of 30 gaps have been filled on CME daily candles (93%). The other unfilled gap is pictured in the lower left of this chart also.”

Woo also lays out both the bull cases and bear cases for Bitcoin. In his list of bullish catalysts for BTC, the analyst includes the likelihood of lower interest rates, a peak in the dollar index, and a return in global liquidity.

“The BULL case for Bitcoin
– Rates dropping
– Global liquidity returning
– DXY [US dollar index] peaking
– Spot ETF (exchange-traded fund) imminent
– Impressive public company treasury demand for BTC indicated by MSTR [MicroStrategy] buying appetite
– paper BTC on the decline
– [crypto critic] Peter Schiff noting gold at all-time high but not BTC
– [anti-crypto Senator Elizabeth Warren] suggesting to North Korea to buy BTC to improve national security
– all of the above long term.”

In his list of reasons to be bearish on BTC, besides the CME gap at $39,000, Woo mentions a net inflow of coins moving into exchanges, a technically bearish setup and a weakening demand for Bitcoin on the futures market.

“The BEAR case for BTC:
– bearish technicals developing
– spot flows coming back into exchanges
– CME gap $39,000
– futures demand easing off
– juicy long liquidations up for grabs sweeping lows
– all of the above short term”

At time of writing, Bitcoin is trading at $42,215.

Generated Image: Midjourney