Markets Update: bitcoin is undervalued again and could extend bull cycle to 2022

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Bitcoin surpassed the USD 50,000 mark on Monday, August 23rd for the first time since last May, a fact that was reported by CryptoNews. A market bulletin published by analyst Willy Woo on Tuesday 24, also commented by this media, revealed that long-term investors (LTH) had begun a phase of BTC sales

, of medium magnitude.

The analyst suggested that the price of bitcoin should correct to compensate for a “bearish divergence” that had emerged, with BTC inflows into exchanges at larger-than-normal magnitudes.

In support of that hypothesis, Woo presented a chart showing a decline in the shock

or unavailability of bitcoin supply, both on the exchanges and in liquidity. This implies more available supply in the market, which increased selling pressure, according to the analyst. Markets Update: bitcoin is undervalued again and could extend bull cycle to 2022 Markets Update: bitcoin is undervalued again and could extend bull cycle to 2022 A bearish scenario was set up after the break of the USD 50,000 resistance. Source: charts.wobull.com

The chart below shows that for one quarter, from February 16 to May 15 this year, the price of BTC remained predominantly above USD 50,000. On the other hand, the break of this level last Monday lasted a few hours.

Markets Update: bitcoin is undervalued again and could extend bull cycle to 2022 Markets Update: bitcoin is undervalued again and could extend bull cycle to 2022 BTC price is approaching USD 50,000 again. Source: TradingView.

The price drop from USD 50,000 was consistent with Woo’s observations, although he clarified that bitcoin’s price structure remains bullish in the long term. Bitcoin is trading at USD 48,071, at the time of writing, according to the CryptoNews price index

.

A study of the bitcoin market in the week of Aug. 16-22, published by Glassnode and commented on by this media outlet, reported that, despite a drop in transactional activity and volume transferred, <a href=”https://www.crip

tonenews.com/markets/glassnode-price-bitcoin-continues-to-rise-weigh-correction/” target=”_blank” rel=”noopener”>there are bullish signs

for the future price development of BTC.

Long-term holders reached an all-time high of 12.69 million cumulative BTC at the end of the week ending August 22. This surpasses the previous high of 12.65 million, recorded in October 2020, and represents 67.5% of the total supply.

Return to bitcoin accumulation

Long-term holders, those who have held bitcoin for more than 5 months have been key to the moves over the past week. The bearish expectations that Willy Woo had been leaning on last Tuesday, changed sign during the week, as the analyst surprised with an extra bulletin published this Friday in which he pointed out that long-term investors were resuming the accumulation. For the specialist, the existence of a supply shock

in the market is reaffirmed. This means that there may start to be less and less availability of BTC in the market.

On the other hand, Woo argues that the spike in demand once again puts the price of bitcoin at a discount to its real valuation

. Within 1-3 weeks, he expects bitcoin’s price action to oscillate between sideways movements and a distinctly bullish development. Subsequently, while he is uncertain about the exact timing, Woo anticipates a further break of the $50,000 mark to come.

Featured Chart of the Week

This Glassnode chart, released this Saturday via Twitter by trader and analyst Will Clemente, shows the evolution of bitcoin’s supply shock quotient from 2012 to the present. It shows that, starting in mid-2019, the supply shock

begins to grow until the recent all-time high in mid-April, declines as the correction begins, and resumes growth. Markets Update: bitcoin is undervalued again and could extend bull cycle to 2022 Markets Update: bitcoin is undervalued again and could extend bull cycle to 2022 The changing pattern of bitcoin’s supply shock suggests a bitcoin “supercycle”. Source: Will Clemente.

Clemente points out that, if he had only one chart to show that we are in a bitcoin supercycle, he would choose this image. The analyst points out that the pattern of evolution of this metric changed last March and that it is a strong proof that we are already in a supercycle. Willy Woo is another supporter of this thesis, as he states in this analysis

, commented by CryptoNews. If the current cycle extends to 2022, bitcoin would be breaking with the 4-year cycles associated with halvings, according to Woo.

Morgan Stanle

and invests more in bitcoin

Last Thursday, a report delivered by the investment bank Morgan Stanley to the US Securities and Exchange Commission (SEC), commented by CryptoNews, was disseminated, in which it is revealed that this financial institution has 6.5 million shares of Grayscale Bitcoin Trust. This investment, which offers indirect exposure to bitcoin, represents more than 245 million dollars, at the current cost of USD 37.80 per share.

Morgan Stanley’s interest in bitcoin has been growing. In April this year it applied to the SEC for permission for 12 of its mutual funds to have exposure to bitcoin and other cryptocurrencies, either through the Grayscale Bitcoin Trust or through cash-settled futures contracts.