Bitcoin is experiencing a “supply shock” currently in the market, woo says.
For the analyst, the target price of bitcoin already exceeds $50,000.
After weeks lateralizing between 30,000 and 40,000 dollars, finally the price of bitcoin (BTC) is about to begin a significant new movement. At least, that’s what analyst Willy Woo predicts.
In its latest newsletter for its subscribers, Woo assured that BTC could be having a big move in the market as soon as from this Saturday, July 17, with range until the following Saturday, the 24th of this month.
On these dates, it points particularly to the beginning of the unlocking of up to 40,000 bitcoins from the Grayscale fund, which begins this Saturday, July 17; and the next difficulty adjustment of Bitcoin mining, scheduled for Sunday 18.
For the researcher, the behavior in the Bitcoin chain it poses a bullish outlook for that break in price lateralization. That is, according to their estimates, in the coming days we would be seeing the recovery of bitcoin, after the debacle of May in which it lost 50% of its value in a span of two weeks.
I expect the price to break from its sideways downtrend in the coming week, followed by a recovery to the $50,000-$60,000 area before further consolidation.
Bid shock would boost bitcoin price
According to Woo’s analysis, bitcoin is experiencing a “supply shock”, which is nothing but a time of scarcity of coins circulating in the market. This drop in BTC liquidity actually moving, which he himself has pointed out recently, usually impacts the price upwards.
As an example of this, the newsletter features a chart showing the bid shock ahead of the run at the end of last year, when BTC surpassed its previous all-time high, past $20,000. Just before that move began, there was an increase in supply shock., which was reflected in the exchanges.
The chart shared by Woo shows a drop in that supply shock in previous weeks, coinciding with bitcoin’s depreciation in the market. But now, the supply of circulating currencies is declining again, to levels that place the value of the cryptocurrency above 50,000 dollars, wrote the researcher.
Bitcoin must assess the imbalance between supply and demand
The bulletin states that the upward outlook is completed by the combination of this supply shock and the accumulation behavior of long-term investors. Only if the latter start selling their coins in the coming weeks could the upward price breakout be compromised.
Woo sees this upward breakout as necessary, as the market has not currently reacted to the decline in the supply of coins. Therefore, he argued that “price action has the need to break higher to properly assess the imbalance of supply and demand”.
We are currently in a new bullish divergence where an offer shock is forming that has not yet been recognized by the price.
The fear must end for bitcoin to rise again
Given the upside scenario posed by Woo, the fear of the last few weeks among investors must still be over, for bitcoin to eventually break higher. Uncertainty has been taking over the market, given the rapid fall in May and the clear resistance that has opposed the level of $ 40,000.
However, Woo sees a scenario conducive to the return of these levels and stop the fear in the market. Especially, with the behavior of “smarter” or more experienced investors continuously accumulating BTC.
According to his analysis, more and more BTC are saved in the long term. Currently, Woo said, there is a spike in accumulation rates, as has been reported in CryptoNews, while the supply of coins on exchanges decreases. Another sign that liquidity is scarce in the market.