Renowned on-chain analyst Willy Woo predicts a looming “cascade” of liquidation once Bitcoin (BTC) reaches the $72,000 mark. Woo, who has a massive following of 1.1 million on the social media platform X, highlights that there are approximately $1.5 billion worth of short positions waiting to be liquidated, with the potential for this to occur all the way up to $75,000, marking a new all-time high.
In addition to this, Woo delves into the Bitcoin Macro Oscillator (BMO), a composite of four key signals: the Market Value to Realized Value (MVRV) indicator, volume-weighted average price (VWAP) ratio, cumulative value-days destroyed (CVDD), and the Sharpe Ratio. MVRV assesses whether Bitcoin is currently undervalued or overvalued by comparing its market capitalization to its realized capitalization. VWAP, on the other hand, provides insight into whether an asset is being traded underbought or overbought based on its intraday price action. The coin days destroyed metric examines Bitcoin transactions while considering the number of days since the coins were last moved, with CVDD tracking this cumulative sum as a ratio to the market age. Lastly, the Sharpe Ratio is utilized to evaluate the risk-adjusted return of an investment by comparing its excess returns to its volatility.
Woo expresses that the recent 2.5 months of consolidation under bullish demand has been beneficial for Bitcoin, allowing for more potential price gains before reaching a peak. The BMO chart indicates a move down by one level, with 2-3 levels remaining to climb before reaching a macro market top.
At the time of writing, BTC is trading at $71,121. To stay updated, subscribe for email alerts and follow on X, Facebook, and Telegram. Remember to exercise caution and conduct thorough research before engaging in high-risk investments in Bitcoin, cryptocurrency, or digital assets. The Daily Hodl does not provide investment advice and participation in trades and transfers are at your own risk. It is essential to note that The Daily Hodl engages in affiliate marketing activities.
