Willy Woo Identifies Factors That Keep Bitcoin From Rallying To New ATH

Willy Woo a top on-chain analyst is looking into critical factors keeping Bitcoin (BTC) ascending from its current levels and soaring to new all-time highs.

Woo shared with Coin Stories that he’s following on one specific on-chain metric according to which Bitcoin is not ready to rally yet.

“If we were to look at where we sit in terms of what I call supply shock which… I would say the ratio of coins held by these really strong holders versus more speculative hands, we’re not at the ratios that we saw in the first and second quarter before May. We’re actually climbing up there but not at the same levels where we last touched the $64,000 range. So structurally, you could say we’re not as bullish on-chain.”

He identifies another factor that is not pushing BTC’s price to higher levels: emergence of Bitcoin futures exchange traded funds (ETFs). Woo argues that the Bitcoin ETFs are driving investors to hold derivative contracts instead of buying BTC directly.

“We’ve also had a lot of changes with the ETFs being approved so those ETFs are futures based. They are not actually buying Bitcoin. They are actually buying futures contracts to get exposure to the price.”

Finally the on-chain analyst says that the super bullish market sentiment that leads to speculative longs actually is not good for driving the price up, as it opens up speculative short positions.

“The other thing is everyone is very, very bullish right now, and whenever everyone’s bullish, it’s very difficult for the price to run upwards because you get a whole lot of speculative long positions in the markets and that makes it very, very profitable to take the other side and short it and prevent the price rise and effectively take out the long positions. The majority is very seldom right.”

Bitcoin ideally would be in a position where market participants are unsure of the trend as it opens up the window for a potential surge, Woo explains.