Willy Woo: We May Never See Bitcoin Price Below $20,000

On-chain analyst Willy Woo believes that the probability of Bitcoin falling below $20,000 again is low, so Bitcoin’s latest rally will continue.

Meanwhile, more data comparing BTC’s behavior in previous rallies concludes that retail investors have yet to arrive, but Bitcoin may already be in tight supply.

Will Bitcoin Never Fall Below $20,000 Again?

It’s safe to say that Bitcoin has been on an upward trajectory since the fourth quarter of 2020. The largest cryptocurrency by market cap fell to the $10,000 level in late September 2020 but quickly accelerated starting in October.

The ongoing price rally has caused Bitcoin to set new 2020 highs, setting a new all-time high and surpassing the coveted $20,000 level for the first time.

However, Bitcoin refused to show any signs of slowing down, and once it reached uncharted territory, its value continued to soar. This led to multiple consecutive records, with one milestone after another falling, and the all-time high occurred on January 3, 2021 - Bitcoin's twelfth birthday, at nearly $35,000.

Naturally, these developments created excitement in the cryptocurrency community. Many members began offering their opinions on how much higher Bitcoin could go or the worst-case scenarios that could occur if Bitcoin price reversed.

Willy Woo, one of the most popular cryptocurrency analysts, reiterated his bullish sentiment. In a recent tweet, he mentioned that Bitcoin might not fall below $20,000. In fact, he believes that only a black swan event (similar to the liquidity crisis caused by the coronavirus pandemic in mid-March) can push Bitcoin below the support level of $24,000.

We will never see $20k BTC again.

$24k support will require a black swan event to break.

The minimum bid price supported by long-term buyers is rising rapidly.

— Willy Woo (@woonomic) January 3, 2021

The differences between the three bull markets in 2013, 2017 and 2020

Another on-chain analyst explored the key similarities and differences between the three most famous bull runs in Bitcoin’s history – 2013, 2017, and the current 2020-2021. More specifically, he examined their relationship to the BTC halving that preceded each rally.

Analysts say the current cycle begins about 150 days after the 2020 halving. By comparison , the so-called “inflection point” in 2017 occurred 250 days after the event, and just 50 days in 2013.

Although Bitcoin’s market cap recently surpassed $600 billion for the first time, the chart below shows that in terms of rapid growth, it still has a long way to go to reach the records of 2013 and 2017.

When it comes to the much-discussed volatility of Bitcoin, the analyst noted that the asset’s current performance is very similar to data from 2017, but much lower than data from 2013. Moreover, he said that “we haven’t really experienced a lot of downside risk so far” in the recent rally.

Retail investors and the Bitcoin supply crunch

The strategist’s view supports a recent claim that there are no retail investors in the 2020/2021 bull cycle. CryptoPotato reported earlier that Bitcoin searches on Google, often a good indicator of retail investor behavior, have surged to their highest level of the year. However, they are still a long way from 2017.

The analyst explored active on-chain addresses, which showed that retail investors were the most active during the 2013 rally.

“This is consistent with the hypothesis that retail investors have not yet arrived en masse, and the rally is being driven by a small group of early adopting institutions and high net worth individuals (HNWIs).”

According to a recent report, massive institutional buying of BTC, all the lost or locked coins, the HODLing mentality of whales, and the unspent supply by miners indicate that the cryptocurrency is in an ongoing liquidity crisis.

The analyst also studied the topic and concluded that "the illiquidity supply crisis is increasing rapidly." It has already surpassed the performance of 2017 and aims to overcome the performance of 2013.

“Previous cycles reached peak illiquidity earlier and then gradually declined as Bitcoin moved out of cold storage and back out for sale. We have not yet reached peak illiquidity and the upward trajectory shows no signs of abating.”