The latest on-chain data for Bitcoin reveals an increase in demand for the pioneering cryptocurrency that has mitigated the downside risk, says a report by analyst Willy Woo published this Friday August 27th. This boost in demand puts the price of bitcoin at a discount from its current valuation, says the specialist.
Woo states in his analysis that he has an expectation of the price action in a range that goes from lateral movements to a clearly bullish scenario , for a period of 1 to 3 weeks. Subsequently, bitcoin would make an attempt to break up to the $ 50,000 mark, Woo anticipates, although he says he is less certain of when that resistance will give way again.
Taking into account the increase of investor demand, bitcoin’s valuation model, based on the supply shock, has returned to a price range close to $ 55,000 .
The macro loop is pointing to a 2022 bullish
One of the most attractiveness of the on-chain structure of bitcoin, is the strong accumulation of BTC by long-term holders (LTH, for their
«Long-term holders control currencies that have not moved for the last two months. more than 5 months. Due to the time it takes for currencies to establish this status, this metric would not be very suitable for short-term market models, but its strength is revealed in the analysis of the macro movements of the cycle ”, says the specialist.
The following graph of the supply shock, corresponding to the LTH, provides a macro timescale view of demand and supply.
Rectangles , Woo notes, indicate the maximum accumulation zone. Also, that maximum accumulation leads to a greater unavailability or a greater supply shock . The highs in the supply shock have been associated in the past with a price rebound zone, says the analyst.
We are now entering the maximum accumulation zone, strongly suggesting a bullish price action later this year and well into 2022. This is It’s a fascinating timeline as, so far, the expectation has been for a bear market in 2022, based on a history of 4-year bull / bear cycles. This cycle looks SO DIFFERENT structurally.
Willy Woo.
Woo does not specify which model would take the place of the four-year bitcoin cycles, but suggests that “a path of price discovery could emerge that track network adoption and eventually be captured in roughly 10-year cycles, ”as seen in traditional markets. This means that, instead of responding to predetermined cycles, the price would become more dependent on the adoption rates of Bitcoin.
In this latest bitcoin market newsletter, Woo changed the bearish outlook reflected in his previous assessment , commented on by CriptoNoticias on Tuesday, August 24, in which he warned about incoming flows of BTC to exchanges, which increased sales pressure. This Friday, CriptoNoticias reviewed new data reported by this analyst, which would confirm the opposite trend, that is, BTC flows leaving exchanges and greater accumulation of LTHs.
At the time of As of the writing of this article, the price of BTC is USD 48,900, which represents a rebound of 1.52% in the last 24 hours and also a fall of 3.5% compared to last Monday’s local maximum of USD 50,400, according to the CriptoNoticias price index.
