Analyst Willy Woo has contemplated that Bitcoin may indicate the beginning of a spike phase employing the divergence between the cryptocurrency price and the Volume-Weighted Average Price (VWAP) oscillator.
The VWAP oscillator is a technical indicator which not only relies on the asset’s price but also considers trading volume to determine the arithmetic average price at which an asset has been traded.
This different direction, in the opinion of Woo, reveals that there is much room for the oscillator to move upwards to the point when a reversal can happen. Besides, this divergence is a good indicator that Bitcoin probably is entering a bullish trend.
Woo’s observation is, undoubtedly, a convincing one, however, it’s paramount to notice that the cryptocurrency market is somehow unpredictable. This Bullish divergence may look perfectly genuine; at the moment but the price might continue to drop in the near future.
When it comes to investment strategies, one should not rely solely on the value of technical indicators.
Bitcoin is currently trading at $ 63,774.66 as per the writing time. The coin price has declined by 0.65% following the one-day chart analysis.
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