Bitcoin price is back at discount levels, says Willy Woo

Key facts

:

  • A bullish consolidation above $50,000 should be completed, says Woo.

  • In less than 3 weeks, a consolidation phase would lead to a new bullish rally.

Bitcoin’s latest on-chain

data reveals a surge in demand for the pioneering cryptocurrency that has mitigated downside risk, says a report by analyst Willy Woo published this Friday, August 27. This boost in demand again puts bitcoin’s price at a discount to its current valuation, the specialist says.

Woo states in his analysis

that he has an expectation of price action ranging from sideways to a clearly bullish scenario, for a span of 1 to 3 weeks. Subsequently, bitcoin would make an attempt at a bullish breakout of USD50,000, Woo anticipates, although he says he is less certain of the timing of when that resistance will give way again.

Taking into account increased investor demand, bitcoin’s valuation model, based on supply shock, has returned to a range for the price near $55,000.

The macro cycle is pointing to a bullish 2022

One of the most attractive aspects of bitcoin’s on-chain

structure is the strong accumulation of BTC by long-term

holders

(LTH) over the past two months, says Woo.

“Long-term holders

control coins that haven’t moved for more than 5 months. Because of the time it takes for currencies to establish this status, this metric would not be well suited for short-term market models, but its strength is revealed in the analysis of macro movements in the cycle,” he says.

The following supply shock chart, corresponding to LTH, provides a view of demand and supply on a macro time scale.

Bitcoin price is back at discount levels, says Willy Woo Bitcoin price is back at discount levels, says Willy Woo A supply shock peak (yet to occur) precedes a major price rally. Source: charts.wobull.com.

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The rectangles, Woo points out, indicate the maximum accumulation zone. Also, that maximum accumulation leads to a major unavailability or supply shock. Supply shock tops have in the past been associated with a price rally zone, the analyst notes.

We are now entering the peak accumulation zone, which strongly suggests bullish price action later this year and well into 2022. This is a fascinating timeline as, so far, the expectation has been for a bear market in 2022, consistent with a 4-year bull/bear cycle history. This cycle looks VERY DIFFERENT structurally.

Willy Woo.

Woo does not specify which model is used.

pariahed the place of four-year bitcoin cycles, but suggests that there could emerge “a random price discovery path that tracks network adoption and is eventually 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 bitcoin adoption rates.

In this latest bitcoin market bulletin, Woo reversed the bearish outlook reflected in his previous assessment, discussed by CryptoNews on Tuesday, August 24, in which he warned of incoming flows of BTC to exchanges, which increased selling pressure. This Friday, CryptoNews reviewed new data reported by this analyst, which would confirm the opposite trend, i.e. BTC flows out of exchanges and increased accumulation of LTH.

At the time of writing, the price of BTC is USD 48,900, which represents a 1.52% rally in the last 24 hours and also a 3.5% drop from last Monday’s local high of USD 50,400, according to the CryptoNews price index .

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