Bitcoin

when

Divergence

An analyst has explained how Bitcoin seems to be showing a good setup to reach escape velocity based on the trend in this indicator. 
<h2 id="bitcoin-vwap-oscillator-has-been-showing-a-bullish-divergence">Bitcoin VWAP Oscillator Has Been Showing A Bullish Divergence</h2> 
As explained by analyst Willy Woo in a new <a href="https://twitter.com/woonomic/status/1787399664486227991" target="_blank" rel="noopener nofollow">post</a> on X, a bullish divergence has appeared to be forming in the Volume-Weighted Average Price (VWAP) oscillator of the cryptocurrency. 
The VWAP is an indicator that calculates an average price for any given asset, taking into account not only the price but also the volume. More formally, it’s calculated as the cumulative price sum multiplied by the volume divided by the cumulative volume. 
This metric puts a higher weight on the price at which more volume is traded. Usually, the exchange-reported volume is used to find the metric, but for a cryptocurrency like Bitcoin, the entire transaction history is visible to the public thanks to blockchain data. Woo has used <a href="https://www.newsbtc.com/news/dogecoin/dogecoin-11-break-0-21-volume-explodes/" target="_blank" rel="noopener ">on-chain volume</a> instead to calculate the VWAP for BTC. 
The VWAP oscillator, the actual indicator of interest here, is a ratio between the asset’s spot price and VWAP. Here is the chart shared by the analyst that shows the trend in this metric over the past couple of years: 
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://pbs.twimg.com/media/GM4d2CPbgAAz7W2?format=jpg&amp;name=4096x4096" alt="Bitcoin VWAP Oscillator" width="2690" height="1700"> 
As displayed in the above graph, the Bitcoin VWAP oscillator has been in the negative territory for the past month but has recently shown a turnaround. 
Although the metric is heading up, it’s still very much contained inside the red zone. At the same time as this rise, the cryptocurrency’s price has been heading down instead. 
According to Woo, this is a <a href="https://www.newsbtc.com/bitcoin-news/bullish-divergence-again-forming-bitcoin-rally/" target="_blank" rel="noopener ">bullish divergence</a> forming for the asset and it’s also one that has a “lot of room to run,” since tops in the coin have generally occurred when the oscillator has reached a point of reversal at relatively high levels inside the positive zone, which should still be quite far away. 
“Seems like a good setup for BTC to reach escape velocity,” notes the analyst. It remains to be seen whether the bullish divergence will end up bearing fruits for the asset. 
In some other news, the Bitcoin <a href="https://www.newsbtc.com/xrp-news/xrp-whales-active-where-sending-coins/" target="_blank" rel="noopener ">whales</a> (investors carrying 1,000 BTC or more) participated in buying around the recent lows of the asset. Still, market intelligence platform <a href="https://twitter.com/intotheblock/status/1787451114855518282" target="_blank" rel="noopener nofollow">IntoTheBlock</a> has revealed that the accumulation sprees from these large investors have been displaying an overall downtrend. 
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://pbs.twimg.com/media/GM5L5_fWEAIjuyc?format=jpg&amp;name=large" alt="Bitcoin Whale Accumulation" width="1781" height="494"> 
From the chart, it’s visible that the Bitcoin whales have been buying at each of the dips in the last few months, but it’s also visible that the scale of this buying has been diminishing with each one. 
This could be a sign that the appetite for buying among these investors, although still present, is getting smaller with each dip. 
<h2 id="btc-price">BTC Price</h2> 
When writing, Bitcoin is trading at around $63,500, up over 1% in the last seven days. 
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://www.tradingview.com/x/c2uCkxiK/" alt="Bitcoin Price Chart" width="1534" height="854">

Bitcoin To Reach Escape Velocity? Analyst Makes The Case

Table of Contents

NewsBTC

Other articles published on May 7, 2024

European Market Now Allows Crypto for Property Deals and Paying Taxes

Spectral Labs Joins Hugging Face’s ESP Program to advance the Onchain x Open-Source AI Community

Charting the Course: NVIDIA's Technological Odyssey and the Future of AI Robotics

BlockDAG Rises As A Promising Long-Term Crypto With Global Support From Influencers Amid Developm...

Bitcoin Welcomes Global Traditional Finance As Borroe Finance Spurs Market Excitement

How to Generate a Passive Income with AI While You Travel the World

Join our free newsletter for daily crypto updates!