As an experienced financial analyst who has closely followed the Bitcoin market for years, I find Willy Woo’s analysis intriguing and thought-provoking. Based on his interpretation of the Bitcoin Macro Oscillator (BMO), we are not yet at the historical top zone, suggesting that there is still room for Bitcoin to run before reaching its next peak.
A analyst has shared his perspective that the Bitcoin price surge may continue to climb higher according to the information provided by this particular indicator.
Bitcoin Macro Oscillator Isn’t At Historical Top Zone Yet
Analyst Willy Woo explores the emerging pattern in the Bitcoin Macro Oscillator (BMO) in his latest publication on X. The BMO is an indicator that calculates an oscillating value around the zero line by merging data from four distinct metrics.
These ratios serve as important indicators for analyzing market performance: the Market Value to Realized Value (MVRV) ratio, Ratio of Volume-Weighted Average Price (VWAP), Cumulative Value-Days Destroyed (CVDD) ratio, and Sharpe Ratio.
As a crypto investor, I’ve noticed that the oscillator depicted in the following chart has gone through some fluctuations during the previous Bitcoin market cycles based on these specific metrics.
The graph reveals that cryptocurrency’s price peaks have historically aligned with significant increases in the corresponding metric. For instance, the prices reached all-time highs in 2013 and 2021 when the indicator surpassed the 1.8 threshold. Conversely, the record-breaking peak in 2017 occurred when the oscillator registered a value of 2.4.
To date in this rally, the oscillator has reached its maximum value at 1.2. Notably, this peak occurred when the asset hit its all-time high (ATH), currently representing the pinnacle of its price increase so far.
Based on historical trends, it appears that this value might not be sufficient for the market to exhibit a cyclical pattern. The price of the coin has stabilized following its peak, causing the oscillator to decrease and currently register at 0.69.
In simpler terms, after a period of about 2.5 months during which Bitcoin showed consistent demand from buyers, Woo, the analyst, believes that the cryptocurrency has some distance to cover before hitting its peak prices in the larger market trend. He estimates that Bitcoin may need to climb through 2 to 3 significant resistance levels before reaching its ultimate high.
As a researcher studying the cryptocurrency market, I’ve noticed that Woo has brought up an intriguing observation about Bitcoin’s net capital flows. Based on the data, there seems to be a promising development unfolding (Woo, 2021). To provide some context, let me walk you through this metric’s trend over the past few years, as illustrated in the following chart:
In the graph, there was a significant influx of capital into Bitcoin when its price approached its all-time high. However, this inflow came to a halt as the asset moved sideways with little price change.
In May, there was a change in direction for the net flows. After a downward trend, these flows began to increase again. This new influx could potentially lead to an uptick in the cryptocurrency’s worth.
BTC Price
Previously, Bitcoin rose beyond $70,500, but it subsequently retreated and is now hovering around $67,800 in current trades.
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2024-05-30 01:16