- What does this mean for BTC price? Are we are still in a bear market?
- Despite Bitcoin recording the 3rd highest one-day gains in history, Will Woo says we are in the first “accumulation” phase.
Bitcoin has been on a tear, going from about $7,350 yesterday to well above $10,000. On some exchanges, it went as high as $10,600.
This has been the 3rd largest one-day gain in Bitcoin’s 10-year long history. According to analyst Willy Woo, the leading cryptocurrency in this cycle is trading like it did in the 2011-2013 cycle.
“The liquidity of the pro funds are the new oversized whales we had in the 2011 days. Expect volatility and chart shapes like a low liquidity shitcoin or early BTC,”
But What Does This Mean For BTC price?
Woo explains in a tweet,
BTC is still in consolidation and blow-off. 4k->14k was an unprecedented series of short squeezes. In other words the price run up was dictated by on-exchange trader games without sufficient organic investment volume to justify a long term climb.
— Willy Woo (@woonomic) October 26, 2019
A similar move has been seen yesterday.
When the big move started, Skew Markets reported in a tweet,
Big squeeze ongoing – $150mln of buy liquidations just went through
BTC +13% last 24h pic.twitter.com/mRvkCpuh1y
— skew (@skew_markets) October 25, 2019
The short liquidated on BitMEX has been approaching $300 million, which is a significant part of $700 million open interest on the BitMEX contract.
As such this sudden and strong price movement to the upside, Woo says was dictated by,
“on-exchange trader games without sufficient organic investment volume to justify a long term climb.”
So now, for at least the next three months, and well into next year, he is expecting Bitcoin to range-bound sideways before the organic investment volume, that has been missing this time, flips Bitcoin into a bullish structure.
But economist and trader Alex Kruger argues that this organic investment is taken as to be reflected on-chain which is “incorrect” as most investors don’t care about “not your keys, not your coins”.
Woo counters that on-exchange supply has increased 4x since last bull run in 2017 and still the majority of HODL is still on-chain. So, these movements provide “a lot of behavioral information that can be extrapolated to on-exchange HODL.”
Does This mean, We Are Still in a Bear Market?
Woo explains, “it’s in a local bear structure, inside a macro bull market.”
But it’s not a bad thing, in any way, in fact, the analyst states,
“the longer this consolidation lasts, the higher the price target for the bull market top.”
Woo breaks it all down by detailing his view of Bitcoin bull markets, which is in three phases.
The first phase is a “pop out of accumulation,” which we are still playing out. The second phase is a long, steady climb with low volatility. The last phase is the “mania” when the volatility simply goes out of control.
Currently, we are in the accumulation phase and will enter the second phase a few months before the reward halving in May 2020, he said. Towards the end of Q1 of 2020 is that time when “a bullish on-chain structure should coincide with halvening front running.” That, Woo says will be the “best time to deploy capital and go long with high certainty.”