Popular on-chain analyst Willy Woo says that Bitcoin should be finished its correction soon, before igniting another upward price move. In an interview with Peter McCormack on What Bitcoin Did, Woo says that Bitcoin’s on-chain fundamentals look healthy and with nothing out of the ordinary to be found. According to him, BTC has been trading in […]
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The massive upside move comes as a part of a rebound that started Friday after Electric Coin Company discussed the prospects of moving Zcash to proof-of-stake.
Zcash (ZEC) surged by nearly 20% in the past 24 hours, helped by the euphoria surrounding its core protocol's decisive transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
The ZEC price logged an intraday high at $188.80 on Binance after rising two days in a row by more than 27%. The cryptocurrency's move upside also wiped out a big portion of the losses it had faced earlier this week, in the wake of a downside retracement across the crypto market.
ZEC price jumped after the cryptocurrency's main developer, Electric Coin Company (ECC), announced that it would move Zcash's protocol from PoW to PoS within the next three years. The nonprofit noted that the upgrade would limit the ZEC price's downward pressures by removing miners that "immediately liquidate" the token for Bitcoin or fiat.
"This shift will also increase the utility for ZEC through capabilities that include yield generation through staking and a possible path to on-chain governance mechanisms for ZEC hodlers," added Josh Swihart, the senior vice president of growth at ECC, adding:
"There are other benefits of moving to proof of stake which include the reduction of the ZEC energy footprint, providing a possible path to on-chain governance mechanisms, and support for interoperability by addressing problems with proof-of-work transaction finality, among other reasons."
Unlike PoW, PoS mechanisms allow a person to mine or validate block transactions based on the number of underlying tokens they hold/stake. In return, the so-called "validator" receives rewards in the form of yields.
Ethereum, the leading smart contracts platform by market cap, also initiated its transition from PoW to PoS after introducing a dedicated smart contract. In response, users locked about 8.33 million Ether (ETH) tokens into the so-called Ethereum 2.0 address, effectively pushing them out of active supply.
ECC's announcement promised that users would be able to stake a portion of their ZEC holdings into a dedicated Zcash smart contract to become validators on its blockchain. Therefore, as a result, more ZEC may end up going out of active circulation due to lockup periods, against its Bitcoin-like fixed supply of 21 million tokens.
Barry Silbert, the founder, and CEO of Digital Currency Group — a venture capital firm tweeted Saturday that he would "buy more" Zcash tokens, citing their supply cap. His tweet coincided with a sudden ZEC price rise against the U.S. dollar and Bitcoin (BTC).
$BTC max supply: 21 million$ZEC max supply: 21 million$ZEN max supply: 21 million
— Barry Silbert (@BarrySilbert) November 20, 2021
Nonetheless, some analysts argued that Zcash would not have a supply cap after implementing PoS.
For instance, on-chain analyst Willy Woo noted in his response to Silbert's tweet that if Zcash could "decide to extend the dev tax," and "if it can switch to PoS and cut out the miners," then he is confident that the cryptocurrency does not have a maximum supply.
"And," Woo added, "that's ignoring the inflation bug of 2018 and assuming we could in fact audit the supply," referring to the Zcash's infamous vulnerability that could have created infinite ZEC tokens.
Related: Zcash Vulnerability Permitting Infinite ZEC Counterfeiting Fixed and Disclosed
Minutes after Woo's remarks on ZEC's doubtful supply ca, Silbert tweeted:
Wow, you all hate $ZEC. I’m going to buy more
— Barry Silbert (@BarrySilbert) November 20, 2021
ZEC's latest push upside made it enter an inflection zone, prominent for its record of capping the cryptocurrency's rallies.
Specifically, the trading range defined by $170-$205 (the reddened area in the chart below) has earlier provided selling opportunities for traders. Even recently, the ZEC price retreated lower after entering the said range while eyeing extended declines toward the purpled upward sloping trendline.
A clear breakout trend may appear after ZEC closes above the inflection zone, accompanied by rising trading volumes, thus targeting the Fibonacci retracement levels at $247 and $316. Conversely, a decisive close below $170 may risk sending ZEC toward $136.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Popular on-chain analyst Willy Woo says there’s one signal hinting that a significant price spike for Bitcoin is on the horizon. The analyst tells his 831,000 Twitter followers that Bitcoin’s NVT (network value to transaction) is at a point that he says historically leads to rallies. NVT is an indicator that gauges on-chain investor volume. […]
The post On-Chain Analyst Willy Woo Reveals One Signal That He Says Historically Leads to Bitcoin Price Jumps appeared first on The Daily Hodl.
Popular on-chain analyst Willy Woo says one under-the-radar metric suggests that ETH is gearing up for an impressive rise. The founder of The Bitcoin Forecast tells his 818,400 Twitter followers that Ethereum’s supply shock fundamentals have yet to show up on the second-largest crypto’s price chart. “While BTC is building up strength for ATH escape […]
The post On-Chain Data Analyst Willy Woo Says Ethereum Quietly Building Solid On-Chain Strength appeared first on The Daily Hodl.
Popular on-chain analyst Willy Woo sees Bitcoin (BTC) as an emerging challenger of gold and expects the leading crypto to ignite a strong uptrend at the tail end of this year. In a new interview, Woo notes that Bitcoin is only a few more multiples away from matching gold’s financial cap of about $4 trillion. […]
The post Bitcoin To Challenge Gold as an Asset and Have Big Q4 Rally, According to On-Chain Analyst Willy Woo appeared first on The Daily Hodl.
Popular on-chain analyst Willy Woo says that recent Bitcoin (BTC) accumulation trends mean the crypto bull run could last for another year. In a new interview with Preston Pysh on Bitcoin Fundamentals, Woo says that long-term BTC holders are much wealthier than in previous bull cycles, which bodes well for the king crypto moving forward. […]
The post Bitcoin Bull Market Could Go On for Another Year, According to On-Chain Analyst Willy Woo appeared first on The Daily Hodl.
Popular on-chain analyst Willy Woo says a few key factors indicate there’s no reason to be bearish on BTC. In a new interview with What Bitcoin Did, Woo says that on top of not being in a bear market, BTC may have broken free from its traditional four-year cycles of price tops and bottoms. “I […]
The post On-Chain Analyst Willy Woo Says There’s No Reason To Be Bearish on Bitcoin Right Now – Here’s Why appeared first on The Daily Hodl.
$42,000 is becoming an increasingly important battleground for Bitcoin bulls and bears.
On-chain analyst Willy Woo asserted that Bitcoin (BTC) would break above the $42,000-resistance level in its coming attempts.
The researcher based his bullish analogy on the so-called Rick Astley indicator, a heat-map that tracks investors—the Rick Astleys of this world—that buy Bitcoin to hold the asset for longer timeframes.
The indicator earlier predicted Bitcoin price spikes based on investors' buying activity below certain technical resistance levels.
However, Woo noted that the "strong-handed long term investors are absorbing" the Bitcoin supply below $42,000, which raises the cryptocurrency's prospects of closing above the level.
"Strong HODLers have been taking this opportunity to scoop large amounts of coinage while we're under the resistance ceiling," tweeted Woo.
The statements came a day after Bitcoin reclaimed its psychological resistance level of $40,000 as support.
BTC sustained above the price floor on Friday despite looming profit-taking sentiment. It established an intraday high of $41,191 before correcting lower to $40,360, as of 12:05 UTC.
Bitcoin's upside prospects looked limited due to its tendency to reject bullish breakout attempts above the $40,000-$42,000 area. In detail, the BTC/USD exchange rate has made at least ten attempts to close above the said range after May 19's notorious crypto crash,
But each time, strong selling pressure around the area prompts the BTC/USD rates lower towards the $30,000-$35,000 range.
Woo's upside predictions also carried the supply squeeze undertones—a situation wherein the number of available Bitcoin supply falls below its spot market demand, leading to higher bids.
Related: This bullish Bitcoin options strategy targets $50K without risk of liquidation
Woo applied his own "Liquid Supply Shock" indicator to conclude that markets ran out of Bitcoin.
In detail, Liquid Supply Shock is the ratio of coins that traders cannot buy versus the coins that they can buy. Woo calculates the supply shock by dividing the coins held by strong-handed investors with the coins held by speculative investors.
"Coins are rapidly disappearing from the available market as strong holders continue to lock them away for long-term investment," said Woo, adding that the supply squeeze could send Bitcoin to $55,000.
"I’ve not seen a supply shock opportunity like this since Q4 2020 when BTC was priced at $10k only to be repriced at $60k in the months thereafter. Our supply shock is still in play with higher prices expected."
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Analyst Willy Woo highlights three on-chain indicators that track the flow of Bitcoin tokens across wallets, each illustrating why the benchmark cryptocurrency could explode higher.
A combination of multiple indicators tracking Bitcoin (BTC) blockchain would continue the benchmark cryptocurrency's price rally further into 2021, popular on-chain analyst Willy Woo anticipates.
In his recent newsletter, the market researcher wrote that he expects Bitcoin prices to reach the $50,000-$65,000 range in the coming sessions. His comments appeared as BTC/USD reclaimed its three-month high above $42,600 only days after crashing below $30,000, the pair's psychological support level.
"My expectation is similar to BTC at $20k all-time-high in January, where the price is pinned close to the $40k-$42k ceiling over a period of days (2 weeks maximum) wearing down sellers, followed by a faster move to $50k," said Woo.
"The next major consolidation band is $50k-$65k."
Bitcoin price rallied alongside supportive comments from Tesla's Elon Musk, Twitter's Jack Dorsey, and Ark Invest's Cathie Wood in July. The cryptocurrency also rose on rumors that global retail giant Amazon would start accepting it as payments, a claim that the company later refuted.
Meanwhile, Bitcoin's run-up to $42,600 also came right after Federal Reserve Chairman Jerome Powell admitted the possibility of interim inflationary shocks during a press conference last Wednesday. In detail, crypto bulls treat Bitcoin as their hedge against rising consumer prices.
Recommended: Bitcoin struggles at $40K after ‘most confusing’ Jerome Powell press conference
What's noteworthy is that the period of Bitcoin's price recovery from under $30,000 coincided with an increasing liquid supply shock. Specifically, BTC was taken off exchanges, which, as Woo suggested, was due to strong holders locking them away for long-term investment.
"As of today, the Liquid Supply Shock metric is at a level which is consistent with a $55K price level," the analyst wrote on Aug. 1, pointing at the high deviation between the available supply and the current Bitcoin prices.
"Despite a powerful 44% rally in less than 2 weeks, we are still in a heavily discounted zone for BTC."
China's ban on cryptocurrency activities in May played a crucial role in sending the Bitcoin prices lower this summer. The decision paralyzed the regional crypto mining industry that accounted for more than half of the global Bitcoin production.
Glassnode reported in June that miners either closed down their rigs to comply with the new law or shifted their operations outside China, thereby incurring additional costs to keep their production running.
The data analytics platform also noted that miners would likely liquidate a portion of their Bitcoin holdings to cover additional expenses. But, as it turned out, the miners' net BTC accumulation trend reversed in May, showcasing capitulation.
But as Woo noted, miners resumed Bitcoin accumulation in July. He cited the popular Bitcoin Hash Ribbon metric, which tracks the network's expansion and loss of hash rate, noting that it was recovering for the first time since the China ban.
"Ribbon recovery events spell the end of miners sell-off (which is what they do when they are driven out of business)," wrote Woo.
"Typically a recovery of the ribbon opens the way for a multi-month period of bullish price action. This indicator did a very good job of locating the price bottom."
The past week has seen strong buying from whales, added Woo while pointing at Bitcoin's climb from $29,300 to over $42,600.
Whales typically represent entities that hold more than 1,000 BTC in their Bitcoin addresses. While they don't exclusively impact the market's directional bias, their buying in conjugation with relatively small Bitcoin investors points to a strongly bullish scenario.
Related: Bitcoin accumulation accelerates among ‘whales’ and ‘fish,’ while BTC rallies to $40K
The analyst noted that all investor cohorts—big or small—were buying Bitcoin for nine consecutive days, an even he has not witnessed in the cryptocurrency's lifetime.
"The present buying by all cohorts is strongly bullish," said Woo. "When everyone is buying, who is the seller? The sellers are traders. The coins sold by traders reduce the speculative inventory on spot exchanges."
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Closely followed on-chain analyst Willy Woo is laying out a price path for Bitcoin (BTC) this cycle. In a new episode of What Bitcoin Did with Peter McCormack, Woo names a few key levels that can trigger a continuation of the Bitcoin bull market. According to the analyst, Bitcoin’s on-chain fundamentals currently give BTC a […]
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