Prominent crypto analyst Willy Woo just released a new Bitcoin indicator designed to show where BTC is heading based on how much Bitcoin miners are selling.
“This indicator speaks to the impact of mining on Bitcoin’s price. As new coins are mined into existence, miners sell some of their mined coins to pay for production costs. This produces bearish price pressure.
The weakest miners sell more of their coins to remain operational. When it becomes unsustainable, they capitulate, hashing power and network difficulty reduces (ribbon compression), leaving only the strong, who sell less leaving more room for more bullish price action.”
The chart below shows the difficulty ribbons compressing at the start of 2019, which indicates miners capitulated, allowing the price of BTC to stabilize and move higher.
Woo says the trajectory of Bitcoin’s current Difficulty Ribbon is similar to the 2012 bull run. If the similarity continues to play out, BTC may be at the start of a long-term bull run.
“As a final note, notice how the 2019 the 2012 bull market have the same structure, we saw severe mining capitulation (ribbon flipped negative) leading to a shorter accumulation band before price breakout. This bull market resembles 2012 more than 2016 structurally.”
In a separate series of tweets to his 103,000 followers last Sunday, Woo declared he is decidedly bullish on BTC, saying “stage two” of a long-term rally will begin after Bitcoin finds its next bottom.
“Stage one of the bull market is completing, once we bottom stage two begins, promising the long sustainable bull drive that takes us through all of 2020 (if BTC continues its personality). Stage one was trader driven dominance squeezing us up and driving fomo. Fomo complete, stage set.”