The scenario turned sharply bullish when Bitcoin achieved the planned consolidation. A large number of wealthy investors are reportedly entering the Bitcoin market.
Well-known analyst Willy Woo recently stated that strong demand from large investors is what makes Bitcoin’s current bullish rally sustainable. He noted that this increasing flow of capital will allow the consolidation of the price in the short term. However, the analyst believes that “we are still in an early stage of the bullish market.”
One of the key drivers of the recent Bitcoin’s boom has been the rapid growth in the number of whales, according to Woo. “High Net Wealth Individuals (HNWI) have been massively arriving after institutions validated Bitcoin,” said the analyst.
There was a coincidence between the accelerated growth of Bitcoin’s price in January 2020 and the pronounced increase in the number of whales. In a few days, the number of investors holding more than 1,000 BTC grew by 10%, thus reaching over 2,100.
The analyst talked about the recent correction of close to 22% and its subsequent recovery. He stated that, after the price decline on January 11th, it would fluctuate between USD 30,000 and USD 42,000.
“The partial crash of Coinbase with the delayed execution of purchase orders led to an unusually high increase in sales. This allowed the pressure of sales to dominate over purchases. Bitcoin’s price on Coinbase was even USD 350 lower than on other exchanges,” stated Willy Woo.
According to Woo, the Coinbase incident involved a significant part of the buying momentum. “People know about much of the latest action of the price through exchanges. For that reason, no one was able to predict the extent of the intensive sales through on-chain capital movements,” said Woo.
Expected Consolidation of Bitcoin’s Price
The strong buying momentum for whales is what led to the aforementioned consolidation, concludes Woo. The analyst said that one of his price models has been accurate “for 12 years, during bullish markets for Bitcoin.” He uses the model to determine the “floor price” of Bitcoin, which is at USD 29,000.
The analyst makes it clear that he does not think that Bitcoin’s price can reach that level. However, he advises that traders should prepare for it and consider it “the worst scenario”.
Investors currently move high amounts of coins but there is/are usually discrete impulses to buy. In the last twelve months, the highest level corresponds to the crash of the markets in March. The current one seems to be the same as that of March, but there have been successive peaks of BTC transfers.
Woo explains that the amount of the USDC stablecoin funds entering exchanges, while BTC coins are exiting them, allows verifying sales. “This is a bullish situation and should provide more fuel for additional increases once the consolidation is complete,” the analyst states.
There are also market participants who tend to trade their bitcoins, in contrast to HODLers. When the price of BTC reaches a high, there usually tend to be more inflows on exchanges. Despite the most recent price increase, there have not been significant BTC inflows on exchanges, suggesting that large buyers are holding on to BTC.
By Alexander Salazar
