BTC market remains bullish despite downturn

On-chain analyst Willy Wu suggests that the BTC market remains bullish. The creator of the stock-to-flow (STF) model, PlanB, agrees with him.

Popular crypto trader and on-chain analyst Willy Wu writes that the growth rate of users in the bitcoin network (BTC) indicates the continuation of the bull market.  Another industry influencer, PlanB, has a similar opinion. He believes that the current correction is within the acceptable deviation within the framework of the bitcoin stock-to-flow (STF) model he created.

Both analysts unanimously claim that bitcoin will soon win back losses and continue the bull market.

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Willy Woo: BTC just warming up

Many took the recent drop in the crypto market with drama. However, others only considered the achieved lows a favorable opportunity for new purchases.

One of the most popular cryptocurrency on-chain analysts is Willu Wu (Willy Woo) shared it with readers, a long-term chart showing the dynamics of the net growth of such an indicator of users in the BTC network as”Entities”.

Recall that for higher data reliability, this indicator does not take into account each bitcoin wallet separately, but considers users (individuals and institutions) who control clusters of network addresses.

As is commonly believed, this indicator of network activity is very closely correlated with the bitcoin exchange rate. However, judging by the chart, the recent collapse of the BTC exchange rate did not lead to a sharp drawdown of the “network entities”indicator.

Net User Growth / Source: Twitter

In contrast, the 14-day average continued to move northward. Paradoxically, the price drop only led to a significant increase in the number of network users.

This is a rather unexpected dynamic compared to the behavior of the indicator at the moments of bubbles in previous cycles. In 2013 and 2017, after bitcoin hit the ceiling, the growth rate of BTC users fell sharply and then could not recover for many months. Now, the indicator has already absorbed the previous high, although the price has not yet demonstrated a convincing rebound.

According to Willy Wu, this is an indication that new users are entering the market, and the structure of the long-term bull market remains.

He also noted that since the launch of bitcoin, the number of its users has doubled every year. This also gives reason to expect that the highs of 2021 will significantly exceed the peak of 2017, and BTC is just warming up right now.

PlanB: just a deviation in the framework STF

Similar opinion adheres to and a popular macro analyst PlanB, creator of the Stock-to-Flow (S2F) model, based on the ratio of the scarcity of bitcoins in circulation to their value. He is sure that the current bitcoin exchange rate does not go beyond the range of acceptable deviations.

According to PlanB, the BTC price dictated by the STF model is currently $60,000 (black line). The limits of acceptable deviation from this value are $ 120,000 and $30,000 (the upper and lower limits, respectively).

These two lines form a forecast channel for the price (blue bar). To continue the bullish trend, it is extremely important for bitcoin not to go beyond the boundaries of this channel.

Model Stock-to-Flow/ Source: Twitter

PlanB adds that the reason for concern will be the situation in which BTC will be stuck in the range of $30,000-$35,000 in the next few months. However, the analyst expects that bitcoin “will make a rebound in the coming days/weeks.”

Read the technical section bitcoin forecast may here.


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