tl;dr
Veteran on-chain analyst Willy Woo warns that Bitcoin (BTC) may enter a prolonged correction phase if it fails to rally by Monday to avoid a bearish divergence on the weekly chart. Despite strong fundamentals, Woo notes BTC is "equalizing" after a rapid rally, with technical resistance emerging. He ...
Veteran on-chain analyst Willy Woo warns that Bitcoin (BTC) may enter a prolonged correction if it prints a bearish divergence on the weekly chart by Monday. According to Woo, BTC needs to rally to avoid signaling a loss of bullish momentum, which could lead to weeks of stagnation.
Woo’s proprietary data from his Bitcoin Vector framework shows that while Bitcoin remains fundamentally strong, it is currently "equalizing" after a rapid rally. He notes, “BTC ran up faster than normal and is equalizing,” with technical resistance manifesting as a bearish divergence despite robust underlying fundamentals.
A bearish divergence occurs when the price reaches higher highs, but momentum indicators like the relative strength index (RSI) record lower highs, suggesting waning bullish strength. Woo cautions, “Dear Mr Bitcoin, you have to rally or you’re gonna print a bearish divergence on weekly charts and then we will be bored for weeks and weeks.”
Importantly, Woo highlights a shift in Bitcoin’s price dynamics. He argues that the traditional four-year halving cycles are losing their predictive power, as BTC’s price action is increasingly driven by global macroeconomic forces rather than internal blockchain events. He states, “BTC is global macro this cycle...BTC is becoming the canary in the coal mine for global macro moves.”
This evolving landscape underscores the growing complexity of forecasting Bitcoin’s price, with macro liquidity and external economic factors playing a larger role than ever before.