Popular on-chain analyst Willy Woo Bitcoin (BTC) thinks the drop will be complete after fulfilling two necessary conditions.
The on-chain analyst tells one million Twitter followers that Bitcoin is already on the decline and that the other condition, accumulation, is currently underway. told.
According to Woo, Bitcoin’s sudden drop following the collapse of Terra (LUNA) last month is a reminder of the time the flagship crypto asset hit bottom in December of 2018. Woo adds that the accumulation phase that Bitcoin went through in the first half of 2019 could be repeated going forward.
“This is where we are right now. The Luna collapse certainly managed to create a sufficiently intense drop stream [2018’in sonlarındaki gibi]. There are first signs that price action is breaking above a strengthening density band to indicate accumulation. [2019’un ilk yarısı gibi]”
However, the on-chain analyst says there are some “missing elements” that manifest themselves when Bitcoin has bottomed out in previous cycles. According to Woo, one of the missing elements is that the rate of Bitcoin at loss is lower than in previous troughs.
“There are some missing elements before the celebration. At historical lows, 60% of supply is at a loss, this time only 47%.”
Woo also reported that there was no increase in the number of Bitcoins sold at a loss during a bearish event this time around.
“Normally, near the end of the bear season we see accumulation strengthens (1) and the capitulation event (2) increases substantially. The big increase is missing so far. Again, there is no need for history to repeat itself in 2022 as the market is structurally different.”
The on-chain analyst thinks the structural differences in the Bitcoin market are related to the introduction of Bitcoin futures contracts and the entry of new players.
“We are structurally different due to mature futures markets where coins can be hedged against USD without selling or moving coins on the chain. Institutional custody service providers are also likely to be making an impact.”
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