The price of bitcoin has risen more than 28 percent since Jan. 1. The rise has been driven by expectations in key financial markets that the U.S. Federal Reserve will continue to delay the pace of interest rate hikes amid falling U.S. inflation.
According to Willie Wu, a pioneer in bitcoin analysis, this puts the bazaar now in the “distrust” phase of the cycle. Referring to the chart below, which is commonly used to describe market cycles in all financial markets, Wu said, “I think we may be in the ‘distrust’ phase of the cycle.”
According to Wu, BTC has already gone through the panic, anger, and depression phase and is therefore at the end of the cycle and about to enter a new bazaar cycle.
The slogan currently dominating investor sentiment is “this rally will be as bad as the next one.” A sentiment that is quite prevalent in real-time cryptocurrencies. Once the phase of disbelief is over, there is hope for a possible cure.
Bitcoin Data Online’s hopeful distrust phase
In support of this statement, Wu cites three key network indicators, the first of which is considered CVDD (total days lost). According to its inventor, Wu, this has historically hit the bottom of the market.
This is based on the teaching that the bazaar reaches higher levels when older coins (e.g. acquired for $1, 000) are transferred to new traders (e.g. $10, 000) As Wu said, the chart shows that the CVDD rate has been safely protected since the end of November.
The CVDD level (circa 2019) was safely defended towards 2 months and without counting COVID cleared the first following test and the fate neared its end. I don’t think the final lyrics are known:). Spot momentum was strong during this move, and at 16, 000 we still saw significant gains heading into the next few months.
Another indication that bitcoin has reached a bottom is believed to be price comparisons. The discount that short-term customers had compared to long-term customers has peaked.
Wu explained that “the only thing that makes short-term coins better than long-term coins is the fundamentals of the bear market,” and shared the following chart: BTC Price Base
Third, the analyst pointed to the BTC Macro Index, which talks about a “very safe” time to buy. Look at the vertical bar halfway up.” At this point, we have about a month before the market rebuilding phase begins,” chats Wu.
At the time this article was published, BTC was worth US$21, 119, just below daily resistance; breaking through US$21, 500 would be critical, as it would be the first time BTC had ever broken through the US$21, 500 mark, which would be the first time it had ever broken through the US$21, 500 mark.