Top Analyst: Bitcoin is still on the way up – despite $3,000 decline
- Bitcoin has fallen dramatically from its peak of $19,500.
- The coin recently fell to $16,200 amid a strong sell-off and lack of buying support.
- Some think that the $3,000 decline could be the beginning of a deeper decline in the coming months.
However, Willy Woo, a prominent on-chain analyst, remains optimistic.
Bitcoin falls dramatically to $16,200
Bitcoin has fallen dramatically from its peak of $19,500. The coin fell to $16,200 today amid a strong sell-off and lack of buying support.
Some believe this is a result of the fact that most US traders and institutions Profit Revolution have taken time off in the last (and next) days due to the Thanksgiving season.
Others believe that the $3,000 drop could be the start of a deeper reduction in the coming months. However, according to analyst Willy Woo, long-term fundamentals in this sector remain bullish as never before, making this a good time to buy.
Referring to the Glassnode chart below (which shows that Bitcoin’s currency flows are neutral), Woo writes
“Margin long positions are beaten until they go short. What was bullish was far overheated. Currency flows are neutral; spot sellers are matched with buyers. The fundamentals are great. The coming weeks? A great time to get cheap coins for 2021.”
He adds that the recent rally from the $17,000 region to $19,000 was dominated by “smaller buyers”. For him, this is a clear sign that the market began to overheat in the short term, as “small buyers” are often an indication of small investors:
“The final phase of the run on the ATH resistance was characterised by smaller buyers, a class run by noob FOMO. However, the rate of these new users who came last week was the highest we have seen in this bull cycle, as high as the 2017 mania levels”.
Chart of BTC’s price behaviour in recent months with an analysis of on-chain trends by Willy Woo (@Woonomic on Twitter). Source: BTCUSD from TradingView.com (@Woonomic on Twitter)
Not the only bull
Other analysts remain bullish despite the ongoing decline.
Regarding how a large amount of Bitcoin is bought by retail investors through platforms such as PayPal, writes Dan Morehead, Co-CIO of Pantera Capital:
“When PayPal went live, the volume began to explode. The increase in itBit volume means that within four weeks of going live, PayPal is already buying almost 70% of the new Bitcoins offering. PayPal and Cash App are already buying up more than 100% of all newly issued Bitcoins”.
Many believe that buyers will eventually outnumber sellers on a given day. This will lead to a huge increase over time, as there is not enough BTC supply on the market to meet market demand.