Although the price Bitcoin It had great difficulty curbing any appreciation movement, as the largest cryptocurrency in market capitalization will jump to $50,000 on the 24th of this month. This is what analyst Willie Wu defends.
After a month long sideways allocation, Woo argues that the price of BTC will resume its rally. For him, the rally started yesterday (16) and will boost BTC throughout the week.
The reason for the analyst’s optimism is the release of Grayscale Fund shares. In other words, Grayscale will be able to sell bitcoins.
In addition, he also mentions the mining difficulty adjustment, which took place on Sunday (18). However, there is a problem that could invalidate the theory.
For Woo, these two factors will break the breadth Bitcoin in a positive way.
Willy Wu said: “I expect the price to break out of its sideways downtrend next week, followed by a rebound in the $50K-$60K area before further consolidation.
The analyst explains that Bitcoin is going through a supply shock. This is a period of shortage of units circulating in the market.
The decrease in liquidity, in turn, tends to positively affect the price of the asset. For example, he states that Bitcoin experienced the same supply shock in 2017, when it reached $20,000.
In this scenario, Woo asserts that the rally has completed between a combination of supply shock and long-term build-up behavior.
The big problem is the condition that the analyst mentioned: “If investors start dumping their bitcoins in the coming weeks, the bullish breakout could be triggered.”
And it seems that only this can happen, as shown by the data.
Bitcoins are targeting exchanges
Although Glassnode published a study stating that investors were withdrawing 2,000 BTC daily from exchanges, this move was recently reversed.
Although there are only two exchanges, this is a huge volume. When investors deposit bitcoins on exchanges, the movement is associated with the intention of selling.
Thus, selling pressure is likely, invalidating the scenario predicted by Willie Wu.