Bitcoin
Analyst Says Bitcoin’s $71,000 Move Is Only Halfway Through, Here’s Why
An analyst explained how Bitcoin’s current surge appears to have reached the halfway point if this indicator passes.
Bitcoin VWAP Oscillator Suggests BTC Only Halving Recovery
In a new publish on X, analyst Willy Woo posted an update on how Bitcoin Volume Weighted Average Price Oscillator (VWAP) it’s looking like after the last rally.
O VWAP is an indicator that, as its full form suggests, calculates an average price for the cryptocurrency based not only on changes in price throughout the day, but also on the volume that has been traded at those prices.
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Typically, this volume is measured using spot volume data provided by centralized exchanges. Still, in the case of Bitcoin, the blockchain is available for anyone to explore, so the on-chain volume is used to calculate VWAP.
The VWAP Oscillator, which is the real metric of interest here, takes the relationship between the cryptocurrency’s spot price and VWAP and represents it as an oscillator around zero.
Earlier this month, Woo pointed out how Bitcoin’s VWAP oscillator was forming a bullish divergence for the asset.
What the VWAP oscillator looked like at the beginning of the month | Source: @woonomic on X
As visible from the chart, the Bitcoin VWAP oscillator rose within the negative territory after forming an apparent bottom at that time. At the same time, the price of cryptocurrency was falling.
In the past, such a setup has proven to be bullish for the coin, and the resulting bullish momentum usually lasts until the VWAP oscillator reaches positive territory. Thus, the analyst noted that the currency had a lot of space to circulate at that time.
Since then, the price has staged a recovery, potentially suggesting that the bullish divergence may be bearing fruit. As Woo pointed out, the indicator returned to the neutral mark after this run.
Based on the fact that tops in the past have occurred after metric peaks in positive territory and based on the scale of these peaks typically, the analyst concludes: “this Bitcoin move is now halfway there.”
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As for how things could play out next, the analyst says,
Consolidation under the all-time high needs to happen for a while, then we will see if the second leg gives us escape velocity to new highs that will open the floodgates.
Woo also shared a “risk signal” for Bitcoin that shows where the asset stands when looking at the bigger picture.
BTC may be in that part of the cycle where risk starts to increase as the price reacts violently to capital contributions. “That’s where most of the quick wins happen,” notes the analyst.
BTC Price
Bitcoin recovered above $71,000 earlier in the day, but the asset appears to have suffered a pullback since then as it is now back below $70,000.
Featured image from Shutterstock.com, woocarts.com, chart from TradingView.com