Key Points
- Bitcoin’s recent uptick has led to a broader bullish trend in the cryptocurrency market.
- Analyst Willy Woo’s study of the VWAP Oscillator for Bitcoin indicates a potential shift in market dynamics.
Bitcoin recently registered a significant increase, with a 4.9% gain over the past week. This increase has led to a wider bullish trend in the cryptocurrency market. Analysts are now closely observing various indicators to forecast the future for the world’s leading cryptocurrency.
Willy Woo’s Analysis
Analyst Willy Woo shared his thoughts on the Volume-Weighted Average Price (VWAP) Oscillator for Bitcoin. The VWAP is a technical indicator that averages the price of an asset, taking into account the volume of transactions at each price level. This method gives more significance to price levels with higher trading volumes, providing a more balanced view of price movements.
In the case of Bitcoin, Woo specifically looked at the VWAP using on-chain volume, which leverages the transparency of the blockchain to provide clear data to all observers. Woo’s focus was the VWAP Oscillator, which measures the ratio between Bitcoin’s spot price and its VWAP.
Recent trends have shown that the VWAP Oscillator has been in negative territory for the past few months but is now on an upward trajectory. If this continues, it could soon reach the neutral zone, indicating a potential shift in market dynamics.
Historical Data and Future Implications
Historical data suggests that when the VWAP Oscillator exits the negative zone and starts to climb, it often precedes a period of bullish momentum for Bitcoin. The price usually continues to rise until the oscillator peaks in positive territory and begins to decrease.
According to Woo, this pattern suggests that “there is still a lot of room to run before a reversal or consolidation occurs,” making it a challenging time for bearish investors in the market.
Adding to these bullish observations, a CryptoQuant analyst also pointed out an increasing number of purchases from retail investors. According to the analyst, they have bought approximately $135.7 million worth of Bitcoin over the past month alone.
This buying spree coincides with a spike in Bitcoin’s daily active addresses, as shown by Santiment’s data. The number of daily active addresses jumped from about 49,000 to over 66,000 in a single day, indicating a significant increase in market activity.
From a technical analysis perspective, Bitcoin’s chart on the 4-hour timeframe showed some promising signs. The appearance of a bullish abandoned baby pattern followed by a bullish engulfing candlestick that closes above its predecessor is a particularly positive bullish signal.
These technical patterns align with Woo’s prediction, suggesting that Bitcoin might be preparing for more gains. Notably, one of the catalysts behind BTC’s current bullishness is the release of the latest CPI data which was slightly lower than the expected 0.4%.
