A Bitcoin analyst explained that the current trend of this indicator shows Bitcoin is in a great position to achieve escape velocity.
Bitcoin VWAP has been showing a bullish divergence
Analyst Willy Woo explains in a recent article post A bullish divergence appeared on X in the Volume Weighted Average Prices (VWAP) oscillator.
VWAP is a tool that helps calculate the average value of an asset. It does this by looking at both price and volume. It’s more formally calculated by multiplying the price by volume and dividing by cumulative volume.
The price that is higher when more volume has been traded will be given a greater weight in this metric. The exchange reported volume is usually used, but with a cryptocurrency such as Bitcoin, all transaction data is available to the public through blockchain data. Woo’s used on-chain volume Calculate the VWAP instead for BTC.
VWAP oscillator is the indicator that’s of most interest. It represents a relationship between VWAP and the spot price for the asset. This chart, shared by an analyst, shows how this metric has changed over the last two years.
In recent days, the value of this metric has been declining | Source: @woonomic on X
The Bitcoin VWAP oscillator, as shown in the graph above, has been in negative territory over the last month. However, it has now reversed.
The red zone is still firmly in place, despite the fact that the indicator’s trending upward. The price of the crypto currency has also been falling at the same time.
Woo says that it is not a problem. bullish divergence The asset is also one which has been formed. “lot of room to run,” Tops of the coin usually occur when the oscillator reaches a point at which it reverses direction, but still within the zone positive.
“Seems like a good setup for BTC to reach escape velocity,” The analyst notes. The analyst notes that it remains to be determined whether or not the bullish divergence in the assets will bear fruit.
Bitcoin is also a hot topic. whales The recent asset lows were influenced by investors with more than 1,000 BTC. Still, market intelligence platform IntoTheBlock It has been revealed that these big investors’ accumulation sprees have been showing an overall downward trend.
The netflow trend of BTC whales in the last couple of months. Source:| Source: IntoTheBlock on X
It’s clear from the chart that Bitcoin Whales purchased at the bottom of each price dip over the last couple of months. But the amount of buying decreased each time.
It could indicate that, despite the fact they are still buying, their appetite is decreasing with every dip.
BTC Price
Bitcoin was trading around $63,500 when I wrote this, an increase of over 1% from the previous seven days.
Source:| Source: BTCUSD on TradingView
Chart from TradingView.com. Image from Unsplash.com.
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