Given the proportion of the Bitcoin supply that is seen as being “underwater,” the well-known Bitcoin (BTC) and cryptocurrency on-chain expert Willy Woo has forecasted that the bottom of the current Bitcoin bear market is getting closer.
Woo stated over the weekend on Twitter, utilizing his so-called “Max Pain” model, that a macro cycle bottom for bitcoin has historically been seen when 58% to 61% of the BTC supply is underwater, which means that it is held by investors who are sitting on an unrealized loss. Woo’s statement was based on the observation that a bottom for bitcoin’s price has historically been seen when 58% to 61% of the BTC
According to Woo’s model, we are coming very close to reaching that level currently.
When a commenter asked Woo where precisely the model anticipates the bottom to be, Woo allowed that the price might still fall further and said that the highest section of the shaded region of his model is at $13,000 “and growing swiftly.”
“Not all bottoms have hit, but for those that didn’t, they got close,” he added.
The “Max Pain” model developed by Willy Woo accurately forecasted the bottom of the bear markets for bitcoin in late 2018 and in 2015. During the bear market of 2011, which occurred during bitcoin’s early years, the price came reasonably close to the bottom price that the model predicted, but it did not reach it.
This year’s forecasts were wrong.
Given his conviction that bitcoin fundamentals continue to go in a positive direction despite “macro headwinds,” Woo forecasted a “decoupling” between bitcoin and equities back in March of this year.
The market is now “completely reset,” and “accumulation has already occurred,” Woo stated on Twitter at the time. This is because spot demand for Bitcoin (BTC) is continuing to rise, and there has been a return to greater demand for Bitcoin futures.
Woo’s forecast that bitcoin will see a bullish decoupling has, sadly, not been realized as of yet.
Compiled by Coinbold