In a new tweetstorm, Woo tells his 572,300 followers that he doesn’t think Bitcoin has entered bear territory.
“The first thing to look at is to answer, ‘Are we in a bear market? Well, bear markets start when no new buyers come in to support the price, and that doesn’t happen. We have a healthy growth of new users joining the network.
In addition to the growth of BTC users, Woo says capital that was previously on the sidelines is starting to make a comeback in Bitcoin.
“The main interest is the rotation of capital from stablecoins to crypto markets (I will say this is mostly BTC since alt coins are declining in dominance). “
The analyst adds that he is seeing chain signals indicating that strong hands continue to accumulate BTC.
“We had a huge sale from previously strong hands (it sounds like noob buyers who bought 1 million to 6 million ago). All of those coins that have been dumped in the market need time to be re-accumulated. It is happening now. Price action looks like an accumulation trough because of this.
Looking at the network-to-value transaction metric, which is calculated by dividing Bitcoin’s market cap by the on-chain transaction volume, Woo says BTC is massively undervalued.
“By using NVT to assess the network, we are statistically oversold against fundamentals at historic levels. Note that we were devoid of a high mania before the sale. This sale occurred when the price was well below fair value. So this does not correspond to the start of bear season.
Although Woo believes the Bitcoin bull market is still intact, he claims that the price expansion could be delayed if investors take a risk stance and move their capital to the US dollar.
“My only concern for downside risk is if we get a major correction in stocks that will pull the price of BTC lower no matter what the chain fundamentals may suggest. Noticing the strength of the USD on the DXY (US Dollar Index), which suggests some investors are looking to USD security.
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Image en vedette : Shutterstock/ConceptCafe