• On-chain analyst Willy Woo says Bitcoin could surge past $40,000 before it gets overheated.
• He believes the recent rally was driven by veteran traders taking advantage of dips in the price.
• Woo also suggests that traders are betting on long-term weakness in the US dollar index.
Bitcoin Could Surge Past $40K Before Overheating
Popular on-chain analyst Willy Woo says that Bitcoin (BTC) may have more room to run after crossing the $30,000 level. According to him, Bitcoin could shoot up more than 30% from its current value of $30,555 before the top digital asset becomes overbought and crosses the $40,000 mark.
Veteran Traders Accumulating BTC
Woo tells his one million Twitter followers that he’s keeping a close watch on Bitcoin’s fundamental strength indicator, which tracks 17 fundamental and technical indicators. He believes that the latest surge was likely driven by veteran traders accumulating BTC when the king crypto’s price dipped down to about $25,000 last week.
Short Squeeze May be Occurring
The analyst also suggests that veteran traders are betting big on Bitcoin as they believe that the US dollar index (DXY) is on the verge of a downtrend. Woo says that in simple terms, what’s happening in the market is what’s known as a short squeeze – when traders borrow an asset at a certain price in hopes of selling it for lower to pocket the difference and are then forced to buy back those assets as momentum moves against them triggering further rallies.
Fundamental Strength Indicator Being Monitored
To get a better understanding of how much room there is for bitcoin to move before it becomes fundamentally overheated, Woo is monitoring his Fundamental Strength Indicator closely. This tracks 17 fundamental and technical indicators across BTC’s network such as miners, cost basis of latest investors, experienced hands selling and technicals among others.
Conclusion
In conclusion, while we can’t be sure yet how far bitcoin will climb before becoming overheated according to fundamentals or whether or not veterans are indeed betting big against DXY weakness – we know one thing for sure: It pays off to keep an eye out for signals from analysts like Willy Woo who can provide valuable insight into what might happen next with bitcoin and other cryptocurrencies!
