October 27, 2020

Analyst: "I don't expect another bitcoin 'catastrophic dump"

In the Bitcoin macrolandscape, current levels look like a good buy price, says Willie Wu.

Trajectory BTC prices are more favorable to the bullishscenario, says statistician Willie Wu. He draws attention to the strong structure of the market and says that current price levels can be a good entry point for investors.

Willie Wu: the likelihood of a "catastrophic dump" of BTC is small

“The next impulse for the transition of coins from hand to hand is complete, and the next price movement in the coming weeks is likely to be upward,” he sums up.

"It is highly unlikely that we will see some kind of catastrophic dump from current values."

Wu draws attention to the level of on-chain activity in the Bitcoin network, the surge in which coincided with the recent decline to $ 9,800.

On Monday, there was a rebound to $ 10,800, the price level forming a decisive reversal for further bullish momentum.

Bitcoin's on-chain activity and BTC price in the last 6 months. : tweet Willie Woo

An alternative to this optimistic positionis the likelihood that Bitcoin is still waiting for another downtrend to fill the lower of the two gaps in CME futures at $ 9,600. Willie Wu notes that the market demand for such a move is great, with significant support from buyers around this level.

“I take into account the likelihood of another short-termdump to fill this gap in futures, but so far it looks like the market has already traded it ahead of time and now the market structure looks very bullish, especially if the current resistance is broken, ”he continues.

“There are many orders in the spot order logs waiting for a chance to buy back BTC at the level of this gap in futures around $ 9,600.”

Fundamental factors on the side of the bulls

PlanB, a stock analyst standingbehind the creation of the Stock-to-Flow family of predictive models, believes that it is time for Bitcoin to follow the historical pattern and go up to $ 100,000.

This one suggests a tenfold rise in price, similar to when BTC went from $ 100 to $ 1000 and then from $ 1000 to $ 10,000 in 2017.

Network fundamentals are in favor ofcontinuation of the long-term trend, with a record high hash rate and the current level of computing complexity of the network. Willie Wu agrees with PlanB on this, noting that changes in the computational complexity of the Bitcoin network are clearly playing into the hands of bulls, not bears.

Computational Complexity (Difficulty Ribbon Indicator) and Bitcoin Price History. : Woobull

“In the“ medium macro perspective ”(months ahead), wewe are in an extremely favorable to buy zone of squeeze of the Difficulty Ribbon indicator after a halving: historically, this was a fairly reliable bullish signal, ”he wrote.

Willie Wu introduced (eng.) Computational complexity indicator Difficulty Ribbon last August. The indicator captures the relationship between the growth rate of computational complexity and sales by miners (and through this, with sales pressure), giving long-term investors a better idea of ​​the feasibility of entering the market at one time or another.

The article contains exclusively private opinions and is not an investment recommendation.