One analyst has explained how bitcoin's rally could still have room to continue before peaking based on data from this indicator.
bitcoin Macro Oscillator Still Not in All-Time Upper Zone
in a new x.com/woonomic/status/1795543265443205539″ target=”_blank” rel=”nofollow”>mail On x, analyst Willy Woo analyzed the recent trend developing in the bitcoin Macro Oscillator (BMO). This indicator combines four different metrics to provide a value oscillating around the zero mark.
The indicators in question are the market value to realized value ratio (MVRV), the volume weighted average price ratio (VWAP), the accumulated value-days destroyed ratio (CVDD) and the Sharpe ratio.
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The chart below shows how the oscillator based on these metrics has fluctuated in value over the past few bitcoin cycles.
From the chart, you can see that the highs in the cryptocurrency's price have historically coincided with the metric reaching relatively high levels. More specifically, the 2013 and 2021 highs occurred when the indicator surpassed the 1.8 level, while the 2017 high occurred when the oscillator reached the 2.4 level.
So far in the current rally, the oscillator has reached a high of 1.2. This high coincided with the asset's all-time high (ATH) price, which remains the all-time high so far.
However, considering historical precedent, this value does not appear to be high enough for the peak to have been cyclical. As the price of the coin has consolidated from this high, the oscillator has cooled and now reaches just 0.69.
Therefore, the asset has moved further away from the area where past highs occurred. “These two and a half months of consolidation under bullish demand have been very good for bitcoin; It means that the price has more room to maneuver before reaching its ceiling,” says Woo. The analyst suggests that btc could now have 2 to 3 BMO levels to go up before hitting the macro high.
Woo has also pointed out a possible positive sign brewing for bitcoin regarding its net capital flows. Below is a graph showing the trend of this metric over the past few years.
As shown in the chart, net capital flows into bitcoin were quite high during the rally towards the ATH price, but money stopped flowing when the asset fell into a sideways movement.
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During May, however, net flows finally reversed the trend as they have increased again. Naturally, this new demand may be bullish for the value of the cryptocurrency.
btc Price
bitcoin surpassed the $70,500 level previously, but the coin has since fallen again, trading around $67,800.
Dall-E Featured Image, woocharts.com, TradingView.com Chart