The prolonged bear market is putting even the most enthusiastic holders to the test. Many are supported by the regular dosage of Hopium that comes from on-chain analysis. However, it appears that perhaps Bitcoin has not bottomed out yet.
This is according to Willy Woo, one of the most respected on-chain analysts in the crypto space. To corroborate his claim, he published a series of tweets today. Here we find 3 indicators according to which bitcoin has not yet bottomed out.
Has one of bitcoin’s biggest proponents suddenly fallen into a recession? Or have we all looked at on-chain analysis too optimistically, and Willy Woo is just trying to regain the lost balance?
Bitcoin is already down – isn’t it?
In regular on-chain analysis provided by BeInCrypto, we have repeatedly pointed to indicators that Bitcoin has already reached – or very close to – the macro bottom of an ongoing bear market. In last week’s analysis, we described 4 on-chain indicators which, according to historical data, confirm that a bottom has been reached.
Among these indicators, we find the Hash Ribbon, Dormancy Flow, Pull Multiple or Realized Loss. Furthermore, the MVRV Z-score has been at all-time lows recently. Even a relatively new indicator called a pie cycle bottom supports the statement that BTC’s macro bottom is already forming.
Willie Woo: Have We Done Down?
Despite this data and the growing layers of Hopium, one of the most well-known and respected on-chain analysts, Willy Woo, published a series of tweets today. He started each of them with the question “Have we done the bottom?” And it seems that the content of each of them answers – no!
The first indicator Willy Woo tells is the cost basis. There he compared the cost basis for buying BTC for short- and long-term holders. It turns out that the historical bear markets of 2015 and 2019 declined only when short-term holders acquired lower cost basis than long-term holders.
Wu said the same thing happened in 2019. However, the last capitulation of BTC occurred in this area (red) in 2015.
Currently, on the cost basis chart, the red line for short-term holders has not yet intersected with the blue line, which represents long-term holders. Once this happens, Bitcoin could reach a final cap and a macro bottom below the current level of $17,622.
bear market accumulation
Another indicator used by Willy Woo is bear market accumulation. The analyst quantitatively defines accumulation as “coins moving from sellers to immediate buyers”.
In the chart he presented, we see the current accumulation period (right) and 3 historical periods. Each corresponds to a rising graph (red, dashed), which represents the size of each bear market accumulation.
Willy Woo then draws arrows of equal size (black), the purpose of which is to compare the size and duration of the accumulation period. In this illustrative way, it turns out that the current accumulation has reached a level a little over half of all previous accumulation periods. What’s more, the macro low on the bitcoin chart only appeared after the accumulation peak was reached.
cost base density map
The last indicator to suggest that the bottom hasn’t been reached yet is the cost base density map. This chart is accompanied by a blue line that represents the percentage of coins experiencing a loss. In other words, their purchase cost was higher than the current BTC price.
Willy Woo claims that currently “the market hasn’t felt the same pain as the bottles before.” He points out that today only 52% of the coins are under water. In contrast, during the macro lows of the previous bear markets, it was up 61%, 64% and 57%.
one in Comment on his own tweet, they claim: “History need not repeat, especially in the modern era with futures hedging available that is not raised on-chain.” He further added that if we were to reach 60% of coins in losses today, bitcoin would be worth $9,100.
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