Bitcoin analyst Willy Woo believes that now is the perfect time for bulls to position themselves for the next upward movement in Bitcoin’s price. One indicator that Woo is closely watching is the Puell Multiple, a metric that has historically been used to identify market tops for Bitcoin.
The Puell Multiple is calculated by comparing the daily coin issuance in dollar terms to the 365-day moving average of daily coin issuance. This ratio provides insight into miner profitability and income stress, serving as an oscillator for market sentiment. Woo has shared a chart that smooths out the Puell Multiple, giving a clear indication of when the indicator transitions from bullish to bearish.
According to Woo, the current Puell Multiple is still below one, indicating that Bitcoin may not have the necessary momentum for a sustained rally. However, it does suggest that the leading cryptocurrency is gearing up for a bullish phase. Additionally, Woo notes that the inventory of BTC on crypto exchanges points to a “neutral bearish” price action, but a potential liquidation-triggered reversal could be on the horizon.
In the short term, Woo predicts a continuation of the bullish swing with possibly one week left in play. In the medium term, he observes a significant amount of spot BTC being accumulated, while exchange inventory for derivatives remains steady. A potential short squeeze could change this dynamic quickly, leading to a bullish market structure. Despite the current neutral bearish sentiment in demand and supply, signs of a shift towards a bullish trend are emerging.
As of the time of writing, Bitcoin is trading at $62,840, showing a slight decrease for the day. Woo remains cautiously optimistic about the future price action of Bitcoin, highlighting the potential for a bullish reversal in the market.
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In conclusion, Willy Woo’s analysis suggests that Bitcoin is on the cusp of a potential bullish rally, making it an opportune time for bulls to position themselves strategically in the market. Keep an eye on the Puell Multiple and other key indicators to stay ahead of the curve in the ever-evolving cryptocurrency market.