According to analyst Willy Woo, expectations of the launch of bitcoin ETFs were combined with fear of being left out (FOMO) to drive a rebound in its price, although in his opinion the cryptocurrency could be overvalued. This boom, which began to accentuate at the end of last week, was key to the establishment of a new historical maximum on Wednesday October 20.
Woo points out in his analysis that, since October 16 last October, at a time when the price of bitcoin surpassed USD 60,000, the market was going through a period of intense purchases due to the possibility of approval of a bitcoin ETF .
The analyst had stated that the price was likely to surpass its previous all-time high of $ 64,900 in its rally. Indeed, this milestone was achieved last Wednesday, a day after the successful launch of the first bitcoin ETF in the United States, facts reported by CriptoNoticias.
In the analyst’s opinion, bitcoin showed signs of being overvalued due to the strong purchase impulse , and warned that if it exceeded the historical mark, there would be a decline in the price, as it did.
In In the graph below, Woo shows that as a result of the supply shock and the supply and demand dynamics of bitcoin, the metric called Supply Shock Oscillator entered the zone indicating oversold.
The fundamental parameters of the network point to a price around USD 50,000, highlights the analysis. The price of bitcoin fell for two days in a row, after the all-time high of USD 66,900, to recover and fluctuate around USD 61,000, as seen in the following graph.
In his analysis, Willy Woo estimated the level of support after the all-time high at $ 64,000. However, the subsequent intense sales affected a decline close to USD 6,000 in two days, Thursday 21 and Friday 22, while this Saturday the price has managed to stay slightly above USD 61,000. At the time of writing this note, the price of BTC is USD 61,132.