On November 21, 2023, the popular onchain analyst Willy Woo presented a detailed chart showcasing the cost basis density map of bitcoin. This analysis delves into BTC’s pricing history and transactional data, pinpointing critical areas of price stabilization and potential zones of support. In discussing the chart, Woo remarked that if the current pattern continues as it has, “we’ll probably never see BTC going below $30k again.”
Willy Woo Examines Bitcoin’s Price and Onchain Data for Key Consolidation and Support Zones
On Tuesday, November 21, marking a full month since October 22, bitcoin (BTC) has consistently stayed above the $30K threshold. Concurrently, onchain analyst Willy Woo informed his 1 million followers on social media platform X that if historical trends persist, BTC stands a solid chance of maintaining its position above the $30K mark without dipping below. While sharing a cost basis density map of bitcoin, Woo said:
We’ll probably never see [bitcoin] going below $30k again if this onchain pattern holds true… (8 for 8 so far). What you see here is bitcoin’s price discovery across 13 [years]. It’s a contour map [of] the [bitcoin] supply according to the price HODLers paid for their coins, and how it changed over time.
Woo details that the horizontal bands represent prices where many bitcoin holders paid similar amounts for their coins. This data shows a strong agreement on bitcoin’s value at those price levels. Woo’s chart shows that after a bear market if BTC reaches one of these strong horizontal price agreement bands leading into a halving event (when mining rewards are cut in half), the price typically never falls back down to test that support level again.
The analyst argues this “up only” pattern is because bitcoin adoption is still increasing rapidly. Whereas commodity markets see declining prices when saturation hits, bitcoin has grown from 10,000 users in 2010 to over 300 million today and is likely to keep expanding as more institutional investors get involved. Woo concluded that “this is only going to climb with a spot ETF.” Following Woo’s X post, a number of individuals responded to his claims. “I remember when you wrote the same thing in 2021,” a person remarked to the analyst.
“You’re wrong a lot, so now there’s a possibility of sub $30K,” another person added.
It’s important to note that while historical data can provide insights, they do not guarantee future price movements. Market conditions can and do change on a dime, and unforeseen events can lead to price fluctuations that defy historical patterns. External factors such as regulatory changes, macroeconomic trends, and technological advancements can significantly impact bitcoin prices. Take for instance the March 11, 2020 ‘Black Swan’ event which brought BTC prices below the $4K range.
On the other hand, if current trends remain consistent, Woo’s analysis over the past 13 years reveals robust zones of price discovery, periods of pre-halving reaccumulation, and instances where bitcoin’s value has traditionally consolidated prior to embarking on a new upward trajectory.
Yet, this isn’t the first instance where BTC advocates have asserted that its price will never fall below a certain range, employing advanced charting tools such as logarithmic growth bands and stock-to-flow (S2F) models. History has shown that these predictions are not foolproof, with some of bitcoin’s fluctuations entirely upending these models.
Source : Bitcoin News by Jamie Redman / Nov 21, 2023