The jump to USD 11,000 started this bullish stage. Months ago, something similar happened but the COVID-19 pandemic ruined the party.
Renowned engineer and market analyst Willy Woo expressed his belief that it is “the beginning of the main phase of the bullish market” for Bitcoin. According to an analysis that he published on Twitter on July 31st, the jump to USD 11,000 started this bullish stage.
Previously, Woo had posted a model on June 27th, also on his Twitter account, which is allegedly taking place these days.
There, he had stated that Bitcoin was preparing for a bullish run, until “the COVID-19 ‘white swan’ ruined the party.” Anyway, he suggested that a new bullish run was approaching. “Maybe one more month,” he predicted on that occasion quite accurately.
According to Woo’s explanation at the time, “the later the bullish market arrives, the greater the price boost will be.” He considers that a long sideways accumulation band like the one produced over several months is “ultimately a good thing.”
Foundations of His Prediction
Now, the analyst notes that the 365-day relative strength indicator (RSI) shows that compression in the early phase of the bullish cycle is nearing completion. This indicator shows the strength of the price when comparing individual upside and downside movements of successive closing prices.
Woo went further, assuring that this compression will be complete in the fourth quarter of this year.
Besides, he bases his prediction on the fact that the mempool, that is, the memory that stores the transactions pending confirmation, is at temporary highs. He sees that as another sign that the rise in the price is near.
Woo also says that the miner’s difficulty ribbon, an indicator based on mining difficulty, is recovering from compression. He explains that this is a bullish indicator since it indicates miners’ capitulation (that is, the sale of their Bitcoin when the market is not profitable) and miners’ strong hodling (accumulation waiting for a price increase) thereafter.
Bitcoin as a Haven of Value
Woo is convinced that Bitcoin has properties that make it a haven of value, and the crisis that the COVID-19 pandemic has unleashed proved it.
The analyst assures that this was the first time that Bitcoin has tested these properties. Even in the worst moment, the fall in its price had less violence than that of other markets such as gold and the S&P 500 index, but it seemed to show a certain relationship with the latter.
In March, with the healthcare crisis in its infancy, Woo reassured Bitcoin holders, assuring them that he was not expecting a drop to lows or a reversal of the bullish trend. “It will first be in the accumulation phase and then move upwards,” he said at the time, and the events of the last few months proved him right.
Despite all his successes and his current optimism, Woo considers that Bitcoin is still a “very immature and little traded” asset. For this reason, the analyst is convinced that “it only takes a few guys with all the ammunition in the world to move it anywhere they want to eliminate most of the traders.”
By Alexander Salazar