Bitcoin on-chain volume data indicates the price has room to rise before encountering its historical resistance.
According to renowned analyst Willy Woo, there are positive signs that portend higher prices for bitcoin (BTC) in the short term.
“Bitcoin probably has between 1 and 3 more weeks of bullish momentum,” warns the specialist. Base this projection mainly on historical on-chain volume data, according to the indicator called the VWAP oscillator.
The VWAP oscillator, which measures the relationship between price and on-chain volume, has been rising for two months. When this occurs, it means that the currency's price is increasing with its volume-weighted average, reflecting bullish momentum.
At the moment, as seen below, this metric has not yet reached the resistance that it has historically registered above level 2. In this sense, Woo considers that bitcoin has room to continue rising as it approaches the historical peak of this indicator
Meanwhile, the bitcoin market has shown strength to exit the period of consolidation that remains below the all-time high price of $73,700 (USD) recorded three months ago. As the following graph shows, the currency is recording higher lows and higher highs on a sustained basis for almost six weeks.
What is causing the price of bitcoin to rise?
This scenario was driven by demand driven by the approval of Ethereum exchange-traded funds (ETFs) in the United States and new economic data. The PCE inflation indicator in the economic powerhouse came out as expected last week, which motivates expectations of a reduction in interest rates this year.
Bitcoin ETFs this week saw their second largest daily capital inflow since their launch at the beginning of the year. Likewise, the purchasing appetite of investors with more than 1,000 BTC, better known as whales, increased to its highest in two months.
Meanwhile, most bitcoin call options expiring in June are for prices ranging from $75,000 to $85,000. This shows that traders are acquiring these instruments as a hedging strategy in case the price rises above
Therefore, the next rate decision scheduled for June 12 and the progress towards the launch of Ethereum ETFs are positioned as key factors for the market. A positive development from these events may be the catalysts the bitcoin market needs to reach new all-time highs.
It should be taken into account, however, that during the summer of the northern hemisphere, which runs from June to September, risk markets tend to go down. Although, for the moment, this pattern is not being repeated with the rise of both bitcoin and stock market shares.
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