Cryptocurrency analyst: Bitcoin to test $5,500 – $5,700 – then recovery

Willy Woo of woobull.com, also known for his work as a crypto analyst and Coindesk/Forbes contributor, posted a tweet on May 25th which won’t make too many people happy. Mr. Woo is apparently very bearish about the current market and feels that Bitcoin is much closer to reaching the $5,500 – $5,700 levels than bouncing off the $7000 line and assuming a bullish trend.

His full tweet said:

“I think we are gonna go to $5500-5700 next, I can’t see $7000 holding. Most likely we’ll balance a bit, then we’ll slide through. Long timeframes here, looking into June for rough timing of this to play out at a best guess.”

In a follow up twitter thread he named some reasons why he feels this way.

  • NVT Signal is still too high. The NVT Signal is an index created by Mr. Woo and Dimitry Kalichki. According to Woo, we need “more blockchain transactional activity to justify the current price, or the price to drop to reconcile the difference.” However he feels this is unlikely to happen, as “to drive up transactional activity in a bear slide is very unlikely IMO.”
  • Volatility is still too high. A sustained low band of volatility is required to signal an end of the detox and the next accumulation phase. According to Woo, it’s still got some time to ride down.
  • Volume Profile cliff is below $6800.

While most of the indicators don’t look too good, Woo focuses on NVT and volatility, saying that “NVT is a fundamental indicator of blockchain activity and valuation while price volatility is a researched area pointing to market stability in different phases.” He feels the market needs more time to have the NVT and the volatility “baseline”, which should happen before the next growth phase. He points out that $5000s are an extremely strong support for Bitcoin and that he doesn’t expect it to go lower than that.

Woo apparently believes that Bitcoin market isn’t depending on longer time frames like traditional financial markets. Instead, he feels the periods of consolidation and climbing are much faster and somewhat easier to call in crypto. On that note, he compares the current market to the one we experienced back in 2014.

Woo feels that we won’t be seeing a “double drop” like we saw in 2014, but that the center section will be cut out and the market will recover quicker post-drop. He concluded his examination by saying:

“So in summary my best guess… slowish bleed down to $6800… then a steeper slide to $5700, then a levelling out of the drop… then a flat zone. This is an educated guess based on volume profile and fundamental data framing the rate of movement.”

The bearish sentiment exhibited by Mr. Woo might have been lessened by todays Bitcoin jump to $7500. However, the market is still way too weak to claim any sort of recovery and the predictions from above might just come to fruition soon enough.

 

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CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

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