With This Historically Reliable Bitcoin Indicator At An All-Time High, Analyst Willy Woo Expects Price To Follow
The bellwether cryptocurrency recently hit a new all-time high — just not the one you are thinking.
A historically reliable indicator, however, suggests bitcoin’s recent surge has more scope to continue after the cryptocurrency’s race to new yearly highs. At press time, bitcoin is consolidating above $13,200, having narrowly failed to take out last year’s high of $13,885.
According to an on-chain cryptocurrency analyst, Willy Woo, the bitcoin NVT ratio is at a record high implying a bullish outlook for the price of the crypto. The bitcoin network value to transactions (NVT) ratio is an on-chain indicator that shows when the bitcoin network is overvalued in comparison to the real value of the transactions going through it.
As of October 27, the top cryptocurrency’s organic valuation based on the NVT from long-term investors had topped $10,000 for the first time in history. Woo goes further to note that as this metric breaks records, the bitcoin “price will follow”.
Bitcoin Is Clobbering All Other Asset Classes
This comes after bitcoin’s furious run-up to new 2020 highs over the past couple of days, while other asset classes like stocks, commodities and precious metals like gold struggled to stave off the grisly bears.
Interestingly, popular macro investor Raoul Pal recently described bitcoin as a “supermassive black hole” that is consuming and destroying everything around it. Pal sees this trend continuing over the next 18 months. And with gold falling against bitcoin, he thinks that the precious metal’s investors will ultimately dump it for bitcoin.
“Bitcoin’s performance is SO dominant and SO all-encompassing that it is going to suck in every single asset narrative dry and spit it out. Never before in my career have I see a trade so dominant that holding any other assets makes almost no sense,” Pal added.
2020 has been a wild year full of so many surprises. Nevertheless, bitcoin has mostly stayed on a steady uptrend. The expansive money printing policies adopted by governments in the face of the pandemic have dramatically raised the possibility of runaway inflation in the foreseeable future. Investors are already seeking suitable safe havens to help them weather the uncertainty storm. Bitcoin fits the profile, according to Pal.
“The macro, flows, technology, demography and societal strains have all converged to this moment in time and the definite answer from markets is – #Bitcoin. I get this sounds a little evangelical but I’m struggling to see it any other way right now.”
It won’t be surprising to see bitcoin soon gather enough momentum to breach the $14,000 level on its way up, in part, due to the high-profile individual investors and institutional money flocking to the asset.
Is this the year bitcoin finally achieves mainstream adoption? Who knows.