Popular on-chain analyst Willy Woo says that Bitcoin (BTC) may have more room to maneuver after breaking through the $30,000 level.
woo recount his one million Twitter followers that he closely monitors Bitcoin’s fundamental strength indicator, which tracks 17 fundamental and technical indicators.
According to Woo, Bitcoin could rise more than 30% from its current value of $30,555 before the leading digital asset becomes overbought.
“If this move completes, here’s a chart to give an idea of how much space we need to move before it’s basically overheated.
By fundamentals I mean what is happening on the BTC network… miners, latest investors cost base, experienced hand selling, technicals etc.
According to Woo, Bitcoin could cross the $40,000 level in continuation of its current rally.
“i.e. ~$40,000 BTC.”
The analyst said that Bitcoin’s latest surge was likely sparked by veteran traders hoarding BTC when the crypto king’s price dropped to around $25,000 last week.
“This move has been dominated by pros accumulating against lower prices.
The chart shows demand for futures, usually the instrument of the pros.
They are not lightening their bags yet, this can change quickly.
Spot (longer term) demand was insignificant.
wow too believes that veteran traders are betting big on Bitcoin as they believe the US Dollar Index (DXY) is about to trend down.
“My best picture is that the pros are trading on longer term weakness in the DXY technical charts. BTC is a great vehicle to trade as a proxy due to liquidity and larger moves.
woo said that simply put, the Bitcoin market is experiencing a short squeeze.
“People who want a simpler breakdown of what this chart means.
The red line represents the growing demand in the calendar futures markets, quantified by basis (the cost of maintaining a long position).
As it turns out, it’s a short distance from that market…”
A short squeeze occurs when traders borrow an asset at a certain price in hopes of selling it at a lower price to pocket the difference, but they are forced to buy back the assets they borrowed as momentum builds. moves against them, triggering new rallies.
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