In the last year, the Bitcoin price has been following a downward trend and have lost around 80% of its value. With Bitcoin being the leading cryptocurrency in the crypto sector, the entire market followed the trend and fell along with it.
Seeing the consistent increase in the price and volume of Bitcoin in the last couple of weeks, the bulls believe that Bitcoin is again ready for a fresh bull run.
As per the opinion of the researcher and cryptocurrency analyst, Willy Woo, the current scenario may not be the ultimate result. Further, in a series of tweets Woo disagreed the return of bull run stating that volatility is the reason for the increase in volume and also mentioned that the on-chain volume is very less to maintain the up – run. He stated that “The initial volume spike false signaled a faster detox and an earlier end to the bear market, but in fact, it was a volatility side effect. That move from $6k to $3k created immense trade volume, but it was in no way a signal that accumulation volume had begun.”
In a tweet on January 5th Woo stated “The initial volume spike false signaled a faster detox and an earlier end to the bear market, but in fact, it was a volatility side effect. That move from $6k to $3k created immense trade volume, but it was in no way a signal that accumulation volume had begun. “he further added “Despite the technical setup that suggests bullishness is possible, there’s not a lot on-chain volume to fuel a prolonged-up move. What we saw in the last seven weeks was a spike of on-chain volume driven by volatility, coins moving to exchanges to trade.”
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In the present circumstances, the volumes have decreased to regular amounts. The Network Value to Transactions (NVT) chart was on the higher side which denotes that the transmitted value on the network is inferior to that of the network valuation. This NVT analysis is an informative measure created by Woo which helps to identify the fundamental values concerning the digital assets and thereby allowing a potential investor to ascertain if the current valuation of the Bitcoin is high or low and take decisions accordingly.
Woo had estimated a bearish stance for bitcoin in November 2018. He alleged that the downward pressure might continue to be on Bitcoin until the second half of 2019. Validating his stand, he cited facts from NVTS stating it has broken its support levels. Woo also concluded that it was improbable for Bitcoin cryptocurrency to move above its 200-Day Moving Average (DMA) and stated that “If price (in the short term) bounces upwards here, which is certainly possible, I think the 200-day moving average is the upper band of the move. This is ~$7k right now. Remember if the price goes above the 200 DMA, in the history of BTCUSD’s 8-year trade history, it’s been a reliable indicator of a bear to bull transitions. It’s too early to transition out of the bear.”
Again, in a chain of tweets, he mentioned that “The initial volume spike false signaled a faster detox and an earlier end to the bear market, but in fact, it was a volatility side effect. That move from $6k to $3k created immense trade volume, but it was in no way a signal that accumulation volume had begun.” Continuing he added “That volume has since subsided. Leaving the NVT chart on the high side of its oscillation around the main move downwards. The key thing here, in my interpretation, is it’s on the high side of its band, so I think an up move is limited, bears will win the longer-term trade.”
Joseph Young recently quoted: “Currently, despite the relatively stable past few weeks demonstrated by the majority of crypto assets, the market remains down by around 43 percent from November levels.”
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At the time of writing the article, Bitcoin was trading at $3,845 on Coinbase, with a market capitalization of around $132 billion.
