How High Can Bitcoin Go Before A Top? Analyst Chimes In
May 29 2024 - 5:00PM
NEWSBTC
An analyst has explained how the Bitcoin rally could still have
room to run before hitting a top based on the data of this
indicator. Bitcoin Macro Oscillator Isn’t At Historical Top Zone
Yet In a new post on X, analyst Willy Woo has discussed the recent
trend developing in the Bitcoin Macro Oscillator (BMO). This
indicator combines four different metrics to provide an oscillating
value around the zero mark. The indicators in question are the
market Value to Realized Value (MVRV) ratio, Volume-Weighted
Average Price (VWAP) ratio, Cumulative Value-Days Destroyed (CVDD)
ratio, and Sharpe ratio. Related Reading: Is Mt. Gox A Worry For
Bitcoin? Crypto Analyst Weighs In The chart below shows how the
oscillator based on these metrics has fluctuated in value over the
past few Bitcoin cycles. From the graph, it’s visible that tops in
the cryptocurrency’s price have historically coincided with the
metric reaching relatively high levels. More particularly, the 2013
and 2021 tops occurred when the indicator breached the 1.8 level,
while the 2017 peak occurred when the oscillator hit 2.4. So far,
in the current rally, the oscillator has achieved a peak value of
1.2. This high coincided with the asset’s all-time high (ATH)
price, which continues to be the top of the run thus far. When
considering the historical precedent, though, this value doesn’t
seem to be high enough for the top to have been cyclical. As the
coin’s price has consolidated since this high, the oscillator has
cooled off, now hitting just 0.69. Thus, the asset has gained more
distance from the zone where tops have occurred in the past. “This
2.5 months of consolidation under bullish demand has been very good
for Bitcoin; it means the price has more room to run before topping
out,” notes Woo. The analyst suggests that BTC could now have 2 to
3 levels of the BMO to climb before reaching the macro top. Woo has
also pointed out a potential positive sign brewing for Bitcoin
regarding its net capital flows. Below is a chart showing this
metric’s trend over the last few years. As displayed in the graph,
net capital flows into Bitcoin were quite high during the surge
toward the price ATH, but money stopped flowing in as the asset
fell into sideways movement. Related Reading: Ethereum Deposits At
4-Month High: Whales Preparing For Selloff? During May, though, the
net flows have finally reversed the trend, as they have been on the
rise once more. This fresh demand can naturally be bullish for the
cryptocurrency’s value. BTC Price Bitcoin surged above the $70,500
level earlier, but the coin has since slumped back down, trading
around $67,800. Featured image from Dall-E, woocharts.com, chart
from TradingView.com
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