Analyst Willy Woo: On-Chain Metrics Suggest That Bitcoin Is Not In Bear Market
On-chain analyst Willy Woo looks into Bitcoin’s (BTC) on-chain metrics in order to get a better overall picture of the current market state.
In a recent ‘What Bitcoin Did’ episode, Woo makes a case based on on-chain analysis that Bitcoin is not in a bear market.
“Structurally on-chain, it’s not a bear market setup. Even though I would say we’re at peak fear. No doubt about it, people are really scared.”
The analyst says that high levels of fear in the market present a good buy-opportunities, because further capitulation is unlikely.
“It’s an opportunity to buy. You don’t often get this kind of pullback without it relief-bouncing even. You don’t sort of slide, slide, slide and then capitulate.
We’ve come down from $69,000 to $33,000. It would be hard-pressed to capitulate from $33,000 down to say $20,000. Because that’s like retracing something like a 2018 bear market over two and a half months instead of a year right.”
Also Woo notes that on-chain metrics show that demand for Bitcoin is coming back, as various investor groups have continued buying BTC.
“Structurally, it’s very, very strong and demand started to come back. And the hodlers that were slightly being just dispirited by the futures traders selling down have stopped selling. They’re rebounding now, and there’s accumulation coming.
The whales are now, and when I say whales these are guys with more than 1,000 Bitcoins, I term a lot of those guys as potentially institutional investors, they are starting to flip over to buying. They peaked their selling in December, so you could say institutions were selling down in December, which is kind of a part of their normal cycle – they sell down, they redeploy in January. Looks like that started…
The futures, you know, coming off the Chicago Mercantile Exchange (CME) and ETF (exchange-traded fund) and you know all the other futures exchanges. But I primarily think that the CME and these futures ETFs drive a lot of this now. That demand started to come in. It started coming in a few days ago.”
At the time of writing, Bitcoin trades at $38,452 up 0.4% on the daily chart.
