Bitcoin’s [BTC] failed attempt at a break-out the last day has significant implications on its price analysis. This is because it comes at a time when the market sentiment has a high bullish penchant.
A couple of reasons or catalysts might have caused the drop, including Jerome Powell’s criticism of Libra. Moreover, the fact that Bitcoin has taken a negative turn on the day Fed announced a rate cut view also raises significant concerns as to its utility as a safe haven.
Nevertheless, TA analysts like Willy Woo have a much more bearish outlook for Bitcoin. In a recent analysis with Tone Vays and Tyler Jenks, Willy Woo spoke about the NVT analysis on Bitcoin. It is a metric that takes into consideration the on-chain volume and market cap of Bitcoin.
According to Willy Woo’s NVT analysis, the market cap has far exceeded on the on-chain volume at this moment. Hence he said,
“So I am really cautious. Now to say its a good time to say this is the top. This is could hang around this region for a long time before it pulls back. But we’re not really in a situation where we’re set up to do a long term bull run.”
Bitcoin Analysis: NVT Signal (Source)
He also suggested a more significant pullback to $8000 levels before another bull run begins. Moreover, Tone Vays believes that there is a further higher probability of a pullback below $8000. Vays tweeted,
Always Bullish on #Bitcoin, but what does it mean for me to be Bullish on $BTCUSD? – It means the probability of New All-Time Highs at $20k is Greater than New Swing Lows at $3k –
This ‘can’ change with a drop under $10k – It just depends on IF,