Analyst Willy Woo believes Bitcoin (BTC) needs to convincingly flip one key level into support to confirm the start of a bullish phase.
Woo tells his 1.2 million followers on X that Bitcoin may go parabolic if the top crypto asset can break through the next major resistance level at $79,000, the cost basis of recent investors.
The cost basis model is an on-chain metric that estimates the average price at which short-term Bitcoin holders acquired their coins. The metric can be used to spot potential entry and exit points.
The analyst also warns that Bitcoin needs to remain above the mid-$60,000 level or there may be a more severe correction.
“The next test for BTC is cleanly breaking the cost basis of recent investors ($79,000). I give it 30% odds on doing this on this attempt. After that, if BTC manages to hold this price level above $65,000 and not break down, then the chances of a structural bottom increases significantly. BTC is currently attempting a bottom, but all the pieces are not yet in place, the next three-six weeks will be telling.”
Woo adds that if Bitcoin flips the $79,000 level into support it signal the end of the ongoing bearish phase based on historic precedence.
“Three things happen at the end of bear markets.
- Price cleanly breaks the cost basis of recent investors (circles).
- Idle smoking of hopium gives way to rabid clicking of the BUY button chasing the price.
- This raises the cost basis (red line transitions to green).”
Bitcoin is trading for $76,237 at time of writing, down 1.3% on the day.
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