Bitcoin Still Has “A Lot Of Room To Run Before Reversal,” Says Top Analyst
17 Maggio 2024 - 6:00AM
NEWSBTC
An analyst has explained how the data of an oscillator for Bitcoin
could suggest the cryptocurrency still has plenty of room to run in
this rally. Bitcoin VWAP Oscillator Could Imply Potential For
Further Upside In a new post on X, analyst Willy Woo discussed what
the latest trend in the Volume-Weighted Average Price (VWAP)
Oscillator for BTC might suggest regarding what could be next for
the cryptocurrency. The VWAP is an indicator that calculates the
average price for any asset by taking into account the price
fluctuations themselves and weighing the values against the trading
volume. Related Reading: XRP & Cardano Whales Load Up Bags:
Preparation For Altcoin Rally? This means that the prices of the
assets where there was a higher volume of trading have a higher
weightage in the average than those with only a low amount of
volume. Traditionally, the VWAP is a technical analysis indicator
that considers the information available through spot exchanges. In
the context of the current topic, the VWAP uses the on-chain volume
of Bitcoin instead, which is readily viewable by anyone thanks to
the blockchain’s transparency. The indicator of interest here isn’t
the VWAP but rather the VWAP Oscillator, as mentioned earlier. This
metric keeps track of the ratio between the BTC spot price and the
VWAP and presents it as an oscillator of around zero. The chart
below shows the trend of this Bitcoin indicator over the past
couple of years. The above graph shows that the Bitcoin VWAP
Oscillator has been in negative territory for the past couple of
months. However, the metric’s value has been rising recently, so if
it continues on this trajectory, it might approach the neutral mark
shortly. In the chart, Woo has highlighted a trend that the
indicator and the cryptocurrency’s price have historically shown.
It seems that whenever the metric has formed a bottom in negative
territory and rebounded back to the upside, the asset has enjoyed
some bullish momentum. The resulting price surge may last until the
indicator reverses into the positive territory and forms a top.
That hasn’t happened for the VWAP Oscillator this time yet. “Still
a lot of room to run before reversal or consolidation,” says the
analyst. “Hate to be a trapped Bitcoin bear right now.” Related
Reading: Bitcoin Not Out Of Danger Yet, NVT Golden Cross Warns In
other news, as CryptoQuant author Axel Adler Jr. pointed out in an
X post, retail investors have bought $135.7 million worth of the
asset over the past month. BTC Price At the time of writing,
Bitcoin is floating around $65,000, up 5% over the last week.
Featured image from Shutterstock.com, woocharts.com, chart from
TradingView.com
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