The well-known onchain expert Willy Woo unveiled a comprehensive chart displaying the cost basis density map of bitcoin on November 21, 2023. In order to identify crucial areas of price stabilization and possible zones of support, this analysis explores the transactional data and pricing history of Bitcoin. Woo said during a discussion of the chart that "we'll probably never see BTC going below $30k again" if the present trend holds true.
Willy Woo looks into onchain data and the price of bitcoin to identify important consolidation and support zones.
Tuesday, November 21, is the first complete month that bitcoin (BTC) has been over the $30K barrier since October 22. Simultaneously, onchain analyst Willy Woo told his one million followers on social networking site X that Bitcoin has a good probability of staying over the $30K threshold without falling below it if past trends continue. Woo stated this while displaying a cost basis density map of bitcoin:
If this onchain pattern continues, it's unlikely that we'll ever see [bitcoin] fall below $30k again. 8 out of 8 thus far. This represents the price discovery of bitcoin over a period of 13 [years]. It's a contour map that shows how the quantity of bitcoin has varied over time based on the price that hodlers were willing to pay for their coins.
According to Woo, the horizontal bars show the prices at which a large number of Bitcoin owners spent comparable sums for their currency. Strong consensus regarding the worth of bitcoin at certain price points can be seen in the data. According to Woo's chart, if Bitcoin reaches one of these strong horizontal price agreement bands during a bear market and there is a halving event (a reduction in mining rewards of 50%), the price usually never drops below that level of support again.
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The analyst contends that the reason for this "up only" trend is the continued rapid growth in bitcoin use. When market saturation occurs, commodity values fall, but bitcoin's user base has increased from 10,000 in 2010 to over 300 million now, and this number is only expected to rise as more institutional investors become engaged. "This is only going to climb with a spot ETF," Woo said. Many people answered Woo's allegations after seeing his X post. "I recall that you wrote the identical thing back in 2021," someone said to the expert.
Another said, "You're wrong a lot, so now there's a possibility of sub $30K."
It's crucial to remember that although past data could offer insights, it cannot predict future changes in prices. Unexpected events can cause price swings that defy previous trends, and market conditions can and do alter at any time. Bitcoin prices are subject to considerable fluctuations based on external variables, including technology breakthroughs, macroeconomic trends, and regulatory changes. Consider the "Black Swan" occurrence of March 11, 2020, which drove Bitcoin values below $4,000.
However, Woo's analysis over the previous 13 years shows strong zones of price discovery, times of pre-halving reaccumulation, and occasions where bitcoin's value has historically consolidated before starting on a fresh upward trajectory—that is, if present trends hold true.
However, this is not the first time proponents of Bitcoin have used sophisticated charting tools like logarithmic growth bands and stock-to-flow (S2F) models to claim that the price of the cryptocurrency will never drop below a given range. History demonstrates that these forecasts are not infallible, since some of the swings in bitcoin have completely defied these models.
How do you feel about the Tuesday assessment by Willy Woo? Please feel free to express your ideas and opinions in the space provided for comments below.