Analyst Willy Woo: One On-chain Signal Suggest Major Bitcoin Rally Ahead
According to prominent on-chain analyst Willy Woo, one signal suggests that a large scale price increase is coming to Bitcoin’s way.
Woo shared with his 831K followers on Twitter that Bitcoin’s NVT (network value to transaction) is at a level, which historically leads to price surge.
NVT Signal takes the total Bitcoin market cap and divides it by the 90 day moving average of daily transaction value. NVT Signal was originally used as a way of picking cycle tops, but due to more coins being held off chain over time, the efficacy of NVT Signal has declined. However, based on this metric, Woo says Bitcoin price is not overheated.
“Adjusted NVT Signal back in the mid zone.
Squiggle to English translation: Price is no longer overheated. Assuming it’s a bull market, historically, this is a zone where price is ready to move up.”
Adjusted NVT Signal back in the mid zone.
Squiggle to English translation: Price is no longer overheated. Assuming its a bull market, historically, this is a zone where price is ready to move up. pic.twitter.com/Sqe3H5PrRA
There is another indicator, that Woo is closely following, which flags bullish signals for Bitcoin in the long-term. According to the analyst, Bitcoin’s market cap is correlated with the total supply of the USD. Looking at the chart below, Bitcoin price continues to rise as the supply of USD grows.
“BTC vs USD (M2) as a global monetary base.
Things are going to get really interesting in the next 5 years.”
The on-chain analyst previously predicted a big Q4 rally for Bitcoin and a market cycle that is very different from previous ones, and likely will extend further into 2022.
“No matter what happens around this choppy next few weeks, we know with very high certainty that we’re going to get a good rally off the tail-end of this year. The fourth-quarter is going to be great and generally with the time signatures of these things, it’s going to run into the first quarter.
We’ll just have to see how it runs into the second quarter of next year. Maybe it goes even deeper, but it’s still really early…
I have no qualms of saying that this is what I think is going to happen, and I don’t think it’s a risky call. I think it’s pretty set in stone looking on-chain.”
