Popular on-chain analyst Willy Woo says Bitcoin (BTC) could potentially have more room to play after breaking through $30,000.
courting told his one million Twitter followers for closely monitoring Bitcoin’s fundamental indicator of strength Sense 17 basic and technical indicators.
Bitcoin could surge more than 30% from its current value of $30,555 before the leading digital asset becomes overbought, according to Woo.
“When that move is complete, here’s a chart that gives a sense of how much headroom we have left before fundamental overheating occurs.
By fundamentals, I mean what’s happening across the BTC network…miners, cost base of recent investors, experienced hands in sales, technicals, etc.”
Source: Willy Woo/Twitter
According to Woo, Bitcoin could cross the $40,000 mark in a continuation of its current rally.
“i.e. about $40,000 BTC.”
The Analyst says Bitcoin’s recent surge was likely caused by veteran traders accumulating BTC as the king crypto’s price fell to around $25,000 last week.
“This move was dominated by professionals accumulating against a price drop.
The chart shows futures demand, usually the tool used by professionals.
They’re not making their pockets lighter yet, that could change quickly.
Spot demand (longer term) was insignificant.”
Source: Willy Woo/Twitter
Woo too believes that veteran traders are betting heavily on Bitcoin as they believe the US Dollar Index (DXY) is on the verge of a downtrend.
“My best picture is that pros are trading on longer-term weakness on the DXY technical charts. BTC is a great vehicle to trade as a proxy because of the liquidity and larger movements.”
courting says Put simply, the Bitcoin market is experiencing a short squeeze.
“People want a simpler breakdown of what this chart means.
The red line represents increasing demand in calendar futures markets, quantified by basis (the cost of maintaining a long position).
Ultimately, it’s just a short exit from this market…”
A short squeeze occurs when traders borrow an asset at a certain price in the hope of selling it at a lower price to recoup the difference. However, they are being forced to repurchase the borrowed assets as momentum works against them, sparking further rallies.
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