Analyst Predicts $47k as Bitcoin’s Next Bottom After Mt. Gox Dump

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As Bitcoin plunges to its lowest price since late February, an on-chain analyst forecasts a further 16% drop, pinpointing $47,000 as the next bottom for the leading cryptocurrency.

Predicting Bitcoin’s Bottom

Adel Axel Jr., a CryptoQuant analyst, proposed this week that $47,000 represents a 25% discount from the average purchase price of short-term Bitcoin holders. This estimate is based on the average price at which all coins were moved within the past thirty days, as tracked on the blockchain.

According to LookIntoBitcoin, the short-term holder realized price was $64,614 as of Wednesday.

“This will be a significant resistance point and a shakeout for new buyers,” Axel shared on X (formerly Twitter) on Thursday. “Previous organic corrections in the bull market have lasted between 60 to 110 days.”

On-chain analysis shows this price level often triggers capitulation among new investors, who tend to panic sell when their investments turn negative. Axel also pointed out the $46,300 price level – the average entrance price for buyers within the past year.

CryptoQuant data indicates that over $2.3 billion worth of Bitcoin moved on-chain on Thursday were last transacted this year, while older coins experienced a less significant selloff.

As of Friday, Bitcoin is trading at $56,374, marking a 20.73% decline over the past month.

An Expected Pullback

Many analysts consider Bitcoin’s recent decline to be long overdue. This week marks the first time since late 2022 that Bitcoin has retreated more than 20% from its local highs, now down 23.58% from its all-time high of $73,700 in March.

In 2017, Bitcoin saw multiple pullbacks of over 20% to 30% while still reaching new highs. Similarly, in March 2020, the cryptocurrency experienced a 60% correction during Covid-19 panic, only to surge almost 20X over the following 13 months.

The current market is grappling with a new kind of panic: on Friday, the bankrupt Bitcoin exchange Mt. Gox announced it had begun repaying customers their long-lost Bitcoin, with 138,985 BTC ($7.52B) still pending.

However, Axel from CryptoQuant suggests that true panic has yet to set in, indicating more volatility ahead.

“Given the current situation, $47k doesn’t seem as dire as it did three weeks ago when Bitcoin was at $70k,” he wrote on Friday. “We need more shakeout, but at a slower pace.”