Popular Bitcoin (BTC) proponent Willy Woo believes that the original cryptocurrency has not yet bottomed. Woo took to Twitter and shared his opinion with his million followers. Woo used max pain to come to his conclusion. The max pain price is the price at which an asset would cause the highest level of financial losses. It is determined by the percentage of coins that are not profitable, or “underwater.”
Woo highlighted that currently, 52% of coins are not profitable. This number is lower than in previous cycles, where it reached 61%, 64%, and 57%. Therefore, by current numbers, we are 5% shy of marking the current price level as that of a reversal. Woo uses data from Glassnode to show Bitcoin’s cost basis density map. He says that,
“the market has not felt the same pain as prior bottoms.”
Woo also says that “History doesn’t need to repeat, especially in the modern era with futures hedging available that is not picked up on-chain.” Nonetheless, the Bitcoin proponent highlights that if max pain does repeat itself and leads to 60% of coins being underwater, that price would be $9100.
One signal that Woo has his eye on, before bringing more is the supply in profit trend-line break. According to the expert, this line “broke cleanly in all of the prior bear market bottoms.”
At press time, Bitcoin (BTC) was trading at $20,287.78, down by 10.2% in the last 24 hours. Moreover, the original crypto is 70.8% down from its all-time high of $69,044.77, which it attained on the 10th of November 2021. Since the all-time high in November 2021, Bitcoin has been experiencing a consistent market downturn for ten months.
The 2022 contraction has not been as substantial from a percentage decline standpoint as previous bear cycle bottoms. The lows in 2015, 2018, and 2020 saw drawdowns from all-time highs of above 77%.