Bitcoin To Reach Escape Velocity? Analyst Makes The Case
07 Mai 2024 - 4:00AM
NEWSBTC
An analyst has explained how Bitcoin seems to be showing a good
setup to reach escape velocity based on the trend in this
indicator. Bitcoin VWAP Oscillator Has Been Showing A Bullish
Divergence As explained by analyst Willy Woo in a new post on X, a
bullish divergence has appeared to be forming in the
Volume-Weighted Average Price (VWAP) oscillator of the
cryptocurrency. The VWAP is an indicator that calculates an average
price for any given asset, taking into account not only the price
but also the volume. More formally, it’s calculated as the
cumulative price sum multiplied by the volume divided by the
cumulative volume. Related Reading: Bitcoin Relative Open Interest
Lowest Since Feb, Analyst Says “Hard To Be Bearish” This metric
puts a higher weight on the price at which more volume is traded.
Usually, the exchange-reported volume is used to find the metric,
but for a cryptocurrency like Bitcoin, the entire transaction
history is visible to the public thanks to blockchain data. Woo has
used on-chain volume instead to calculate the VWAP for BTC. The
VWAP oscillator, the actual indicator of interest here, is a ratio
between the asset’s spot price and VWAP. Here is the chart shared
by the analyst that shows the trend in this metric over the past
couple of years: The value of the metric seems to have been on the
decline in recent days | Source: @woonomic on X As displayed in the
above graph, the Bitcoin VWAP oscillator has been in the negative
territory for the past month but has recently shown a turnaround.
Although the metric is heading up, it’s still very much contained
inside the red zone. At the same time as this rise, the
cryptocurrency’s price has been heading down instead. According to
Woo, this is a bullish divergence forming for the asset and it’s
also one that has a “lot of room to run,” since tops in the coin
have generally occurred when the oscillator has reached a point of
reversal at relatively high levels inside the positive zone, which
should still be quite far away. “Seems like a good setup for BTC to
reach escape velocity,” notes the analyst. It remains to be seen
whether the bullish divergence will end up bearing fruits for the
asset. In some other news, the Bitcoin whales (investors carrying
1,000 BTC or more) participated in buying around the recent lows of
the asset. Still, market intelligence platform IntoTheBlock has
revealed that the accumulation sprees from these large investors
have been displaying an overall downtrend. The trend in the netflow
of the BTC whales over the past couple of months | Source:
IntoTheBlock on X From the chart, it’s visible that the Bitcoin
whales have been buying at each of the dips in the last few months,
but it’s also visible that the scale of this buying has been
diminishing with each one. Related Reading: XRP Forms On-Chain
Signal That Led To 16% Crash Last Time This could be a sign that
the appetite for buying among these investors, although still
present, is getting smaller with each dip. BTC Price When writing,
Bitcoin is trading at around $63,500, up over 1% in the last seven
days. Looks like the price of the asset has been going up over the
last few days | Source: BTCUSD on TradingView Featured image from
Kanchanara on Unsplash.com, IntoTheBlock.com, chart from
TradingView.com
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