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 metric divides the total value of the Bitcoin network by the total transaction volume flowing through the BTC blockchain and then smooths it out with a moving average. Based on this metric, Woo says Bitcoin is not overheated price-wise.
“Adjusted NVT Signal back in the mid zone.
Squiggle to English translation: Price is no longer overheated. Assuming it’s a bull market, historically, this is a zone where price is ready to move up.”
On a longer-term basis, the closely followed analyst has also his eye on another indicator that he says is bullish for Bitcoin. Woo suggests that Bitcoin’s market cap is correlated with the total supply of the US dollar (M2). Based on Woo’s chart, Bitcoin could continue to trend upward as the supply of USD grows.
“BTC vs USD (M2) as a global monetary base. Things are going to get really interesting in the next 5 years.”
Woo recently called for a big Q4 rally for Bitcoin and a market cycle that is unrecognizable from previous ones, likely extending well into 2022.
“No matter what happens around this choppy next few weeks, we know with very high certainty that we’re going to get a good rally off the tail-end of this year. The fourth-quarter is going to be great and generally with the time signatures of these things, it’s going to run into the first quarter.
We’ll just have to see how it runs into the second quarter of next year. Maybe it goes even deeper, but it’s still really early…
I have no qualms of saying that this is what I think is going to happen, and I don’t think it’s a risky call. I think it’s pretty set in stone looking on-chain.”
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