The history of the falls in Bitcoin’s price reveals key points that are bullish, according to Willy Woo. During the bullish run in 2017, there were big corrections that resulted in opportunities to buy cheaply.
In recent days, Elon Musk announced that he stopped accepting payments with Bitcoin, leading to panic and hysteria in that market. The price of the crypto asset has fallen by more than 20% but some analysts find positive readings in tracking and research data.
In a tweet, renowned analyst Willy Woo shows that Bitcoin’s bullish run is not over. A graph indicates a divergence between the price of BTC and the total value sent over the network. Woo himself developed this indicator, known as the Bitcoin NVT (network value per transactions) Ratio.
It is possible to find some coincidences in the history of the falls in Bitcoin’s price, according to the analyst. In the last eight years, the market has fallen below the NVT ratio several times.
Bitcoin’s market capitalization exceeds its transaction volume when the relationship between price and transaction rate is high. This unjustifiably inflated price would represent a bearish trend.
However, Woo’s graph currently shows a low NVT rate. In other words, the transferred value does not compare with the increase in the use of the network. The analyst notes that a price increase follows it in most cases.
Holders Contain the Fear that Spreads on the Bitcoin Network
This is not the best moment for Investor sentiment towards Bitcoin. According to the Fear and Greed index for Bitcoin, a point of “extreme fear” is making it fall to the levels of the 2020 crisis. At that time, the start of the COVID-19 pandemic unleashed it.
Investor Raoul Pal considers that this is not a time to worry. He shared a tweet with positive data that he extracted from a Bitcoin blockchain in full decline. He predicts that the market value of the pioneering cryptocurrency will rebound in the short term.
Pal says that Bitcoin’s price is undergoing a “perfectly normal and healthy” correction, so he believes that it is time to buy or hold. His chart shows a falling wedge and indicates that the price of Bitcoin will exceed USD 60,000.
The Drop in the Price Is an Opportunity to Buy Cheaply
Analyst William Clemente agrees with Pal that the price of Bitcoin has already reached the bottom and will now start recovering. He states that users are just perceiving that there is an opportunity to buy cheaply. This would be the third time in the last three months of the current bullish run.
It seems that users tend to miss the few buying opportunities that emerge in a bullish rally. This is not different from what has happened in the past. In 2017, the prices of Bitcoin dropped three times showing opportunities to buy cheaply.
Blackrock’s Chief Investment Officer (CIO) Rick Rieder classified Bitcoin as an “asset of interest”. He says that it plays a role in investment portfolios that people still do not understand completely. He believes that the pioneering cryptocurrency will mature, overcome challenges, and “become part of the investment field.”
By Alexander Salazar
