Key facts:
Growth in bitcoin users has accompanied price growths.
No structural signs of a bear market in sight, says Willy Woo.
Confirming that bitcoin (BTC) is going through a supply shock phase and that a bullish breakout could materialize in the coming days, analyst Willy Woo highlights that the growth of the network's users is one of the factors that will drive the upward price movement.
Woo had already stated that there was a clear divergence between bitcoin's sideways price movement and the network's fundamental parameters in his previous newsletter on that cryptocurrency's market, which was commented on by CryptoNews. The analyst, on the other hand, assured that bitcoin could reach USD 50,000 in the coming days, in an analysis reported this Friday by this media.
To support his hypothesis, Woo presents, in a private report, the growth of bitcoin users as one of the main arguments in favor of boosting the price. In the graph below, the specialist shows the evolution of user growth alongside the bitcoin price curve.
As user growth comes to a halt, a bearish era ensues, says Willy Woo. Source: charts.woobull.com.
Woo explains that, to calculate user growth, he takes the number of newcomers and subtracts those who leave the network, after spending or selling the BTC he owns.
As I mentioned in the previous two newsletters, the fundamental parameter of user growth is solidly bullish. There are no structural signs of a bear market in sight. In fact, we are in a region of parabolic growth (even on a logarithmic scale).
- Willy Woo, bitcoin market analyst.
Another aspect of the importance of user growth that Woo highlights with respect to price is indicated in the graph above with circles, each time there is a local maximum of users. When the number of users starts to decrease, a downward price cycle begins, as shown in the graph.
In my 8 years in the bitcoin market, I have never seen fundamental parameters not influence the price if given enough time. The market is not appreciating bullish fundamental parameters, which opens up a great buying opportunity for those who are patient.
- Willy Woo, bitcoin market analyst.
The low volatility of bitcoin, the unwinding of Grayscale's bitcoin fund shares this Saturday, July 17, and the new difficulty adjustment on Sunday, July 18, form, along with user growth, a high-probability window for a major price move this coming week, Woo concludes.
