According to renowned analyst Willy Woo, there are positive signs that portend higher prices for bitcoin (BTC) in the short term. “Bitcoin probably has between 1 and 3 more weeks of bullish momentum,” warns the specialist. He bases this projection primarily on historical on-chain volume data, based on the indicator called the VWAP oscillator. The VWAP oscillator, which measures the relationship between price and on-chain volume, has been rising for two months. When this occurs, it means that the currency's price is increasing with its volume-weighted average, reflecting bullish momentum. For now, as seen below, this metric has not yet reached the resistance it has historically recorded above level 2. In this sense, Woo considers that bitcoin has room to continue rising as it approaches the historical peak of this indicator.
The bitcoin VWAP oscillator is shown in orange and the price of the digital currency is shown in blue. Source: Willy Woo. Meanwhile, The bitcoin market has shown strength to exit the consolidation period which remains below the historical maximum price of 73,700 dollars (USD) recorded three months ago. As the following graph shows, the currency is recording higher lows and higher highs on a sustained basis for almost six weeks.
Bitcoin price in the last three months. Source: TradingView.
What is causing the price of bitcoin to rise?
This scenario was driven by demand driven by the approval of Ethereum exchange-traded funds (ETFs) in the United States and new economic data. The PCE inflation indicator in the economic powerhouse came out as expected last week, which motivates expectations of a reduction in interest rates this year. As BitcoinDynamic reported, Bitcoin ETFs recorded their second largest daily capital inflow this week since its launch at the beginning of the year. Likewise, the purchasing appetite of investors with more than 1,000 BTC, better known as whales, increased to its highest in two months. Meanwhile, most bitcoin call options expiring in June are for prices ranging from $75,000 to $85,000. This shows that traders are acquiring these instruments as a hedging strategy in case the price rises above. Therefore, the next rate decision scheduled for June 12 and the progress towards the launch of Ethereum ETFs are positioned as key factors for the market. A positive development from these events may be the catalysts the bitcoin market needs to reach new all-time highs. It should be taken into account, however, that during the summer of the northern hemisphere, which runs from June to September, risk markets tend to go down. Although, for the moment, this pattern is not being repeated with the rise of both bitcoin and stock stocks.