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He said that his observation is largely based on demand and supply data, indicating an accumulation phase by investors. Data by CryptoQuant also indicated a resilient bull market based on the current valuation cycle. After looking at historical data, Woo observed that accumulation by long-term holders would take another month or two to reach its peak.
Also, it would likely play out positively on the price in the upcoming months. Further, the CryptoQuant analysis supplemented Woo’s prediction that BTC was yet to reach its end-of-cycle top before the onset of a bear market. Woo predicted that the strong market can “peter out from December onwards.” However, he also added,
“I think it’s a fair chance that we’ll not go into what we think which is a traditional Bitcoin bear market, which generally is a huge retrace of maybe 80% of its value…”
Woo predicted a less volatile, “mature” market in the future. A market that can help Bitcoin break out from “its four-year cycle.” He projected that Bitcoin might find its fair value and may not replicate the price action from the last three cycles. Instead, it could resemble a “drunken walk” without a large range rally and market fall.
A typical Bitcoin cycle generally consists of four phases: rally, correction, accumulation, and recovery. Woo predicted,
“I don’t think we’re going to have… these normal four-year cycles again. I’m calling this the ‘last cycle.’ “
Another aspect that extends the maturity of a market is the number of investors in the asset. It can factor in to reduce high-range volatility. According to Woo, BTC is on its way to one billion users by 2025, equivalent to the number of internet users in 2005, based on “projected worldwide bitcoin users expressed in internet years.”
However, another impediment to BTC’s widespread acceptance is its high price. Bitcoin had a strong year, with a high of more than $64,800 in April. At the time of publication, BTC was trading about $50,200.
Does that make Bitcoin too expensive for new users?
Woo mentioned that the logical way to consider this was by looking at risk-reward indicators instead of its absolute price. According to his analysis, the Sharpe Ratio of BTC beat that of any other asset class in the last four years.
A recent Bloomberg report was also bullish on Bitcoin. As per the report, BTC would cross the $100,000 mark with “least resistance,” and,
“In addition to increasing demand and adoption, a key bullish Bitcoin guide is that 2021 is a post-supply-cut year, which have typically been the top performers.”