(The cycle will repeat in the next days / Pixabay)
BTC flows on exchanges are shifting from predominantly inbound to outbound, analyst Willy Woo said in his latest bitcoin market prediction on May 8.
This reflects further strengthening of purchases, as BTC continues to move towards large holders at increasing rates, according to the analyst.
“There is also a decent probability that altcoin capital will start moving towards bitcoin in the next few weeks.
Bitcoin is undervalued by USD 58,000, according to on-chain value metrics”, says Willy Woo.
Through the NVT metric, or the market capitalization divided by the daily volume of transactions of BTC, Woo affirms that BTC is undervalued.
The network would be in very organic levels of valuation, with very little premium in the price.
“We do not see this scenario since October 2020, Bitcoin is very cheap at the moment”, asserts the analyst.
Also, the floor price of bitcoin, supported by long-term investors, is at $ 52,000 and is increasing steadily, says Willy Woo.
The bitcoin derivatives markets have cooled off, according to the analyst.
"Speculators have not yet entered significant volumes, most likely due to the recovery period from the substantial losses of three weeks ago ($ 5 billion in BTC liquidations)," says Woo.
He believes that the recovery that has been seen coming from the spot investors who are buying. The analyst highlights that currently little speculative premium is seen.
A sustained decline in bitcoin futures contracts can be seen in the graph from mid-April.
BTC flows to bearish exchanges, which were responsible for the sales at a time when the price of bitcoin fell, has already subsided, says Woo.
The net flows have changed to a bullish scenario, that is, the predominantly outgoing flows resume, according to the analyst, as shown in the following graph.
Throughout this extended period of consolidation, BTCs have been moving towards the big holders, Woo claims.
"We certainly saw a weakly bearish period in the last three weeks, but the trend is moving into bullish territory again," Woo says.
Since March, Woo observes, altcoins have been in a bullish period, which has been dubbed "altcoin season."
This has been reflected in the loss of dominance of bitcoin.
At the time of writing, bitcoin dominance is at its lowest level of the year, 44.38%, according to CoinMarketCap.
"We are going through a high probability zone for this trend to reverse next week," says Woo.
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