- Willy Woo based his latest analysis on the uptrend of the VWAP oscillator
- Retail investment and technical patterns also appeared to support a bullish outlook
Bitcoin has recently registered a notable increase, with gains of 4.9% in the past week. This upswing has contributed to a broader bullish trend in the cryptocurrency market. Analysts are now closely monitoring several indicators to predict what lies ahead for the world’s leading cryptocurrency.
One of these analysts, Willy Woo, shared his insights on the Volume-Weighted Average Price (VWAP) Oscillator for Bitcoin, discussing its potential implications for future market movements.
Woo’s analysis on the social media platform X dug in the VWAP, a technical indicator that averages the price of an asset, taking into account the transaction volume at each price level. This approach places more importance on price levels with higher trading volumes, providing a more balanced view of price movements.
For Bitcoin, Woo specifically examined the VWAP using on-chain volume, which takes advantage of the blockchain’s transparency to provide clear data to all observers.
The role of the VWAP oscillator in predicting Bitcoin’s path
The focus of Woo’s research is on the VWAP oscillator, which measures the ratio between Bitcoin’s spot price and its VWAP, and represents this relationship in a form that fluctuates around zero.
Source: Willy Woo on X
Recent trends show that the VWAP oscillator has been in negative territory for the past few months, but is now in an upward direction. Should this continue, it could soon reach the neutral zone, signaling a possible shift in market dynamics.
Historical data also seemed to indicate that when the VWAP oscillator leaves the negative zone and begins to rise, it often precedes a period of bullish momentum for Bitcoin. The price typically continues to rise until the oscillator peaks in positive territory and begins to fall.
According to Woo, this pattern means that “there is still a lot of room before a reversal or consolidation occurs,” making it a challenging time for bearish investors in the market.
Private investors and technical indicators support the bullish sentiment
Complementing these bullish observations, a CryptoQuant analyst also said marked an increasing number of purchases from private investors. According to the analyst, they purchased approximately $135.7 million worth of Bitcoin in the past month alone.
Source: CryptoQuant
This buying wave corresponds to a spike in Bitcoin’s daily active addresses, as evidenced by Santiment’s facts. The number of daily active addresses increased from approximately 49,000 to over 66,000 in one day, illustrating a significant increase in market activity.
Source: Santiment
Also from a technical analysis perspective, Bitcoin’s chart over the 4-hour time frame showed some promising signs. The appearance of a bullish exiting baby pattern, followed by a bullish engulfing candlestick closing above its predecessor, is a particularly positive bullish signal.
Source: BTC/USDT, TradingView
These technical patterns are consistent with Woo’s prediction, indicating that Bitcoin may be gearing up for more gains. In particular, one of the catalysts behind BTC’s current bullish price is the release of the latest CPI data, which was slightly lower than the expected 0.4% as previously reported by AMBCrypto.