On-Chain Analyst Willy Woo Says Bitcoin Getting Close to ‘Max Pain’ Levels – Here’s How Low BTC Could Go

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Popular on-chain analyst Willy Woo has a “max pain” model for Bitcoin that suggests a floor price for BTC at the bottom of its bear market.

Woo tells his one million Twitter followers that he’s estimating a Bitcoin bottom by looking at where BTC’s price would be if 58% to 61% of all coins would be below the price of purchase, or at a loss.

“Bitcoin bottom is getting close under the Max Pain model.

Historically BTC price reaches macro cycle bottoms when 58%-61% of coins are underwater (orange).

Green shading adjusts for the coins locked up inside GBTC Trust.”

Source: Willy Woo/Twitter

Looking at the zoomed in view of the chart, the model appears to be suggesting that Bitcoin can still drop to around the $12,000 price range.

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Source: Willy Woo/Twitter

In a separate, less severe model, Woo says BTC is testing a bottom based on CVDD (Cumulative Value Coin Days Destroyed).

Explains Woo,

“When coins pass from old investor to new investor, the transaction carries a USD value and also destroys an amount of HODL time by the previous holder. CVDD is the cumulative sum of this value-time destruction as a ratio to the age of the market and divided by six million as a calibration factor.”

Woo says that the CVDD model is based on the idea that BTC tends to establish a new price floor as a fresh generation of investors enters the market.

“CVDD floor price being tested.

Uses age and value of BTC moving to new investors to create a floor.

Theory: when significantly old coins (say bought at $100) pass to new investors (say at $16,000), the market perceives a higher floor.”

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Source: Willy Woo/Twitter

 

At time of writing, Bitcoin is trading at $16,235, a 76.50% decrease from its all-time high.

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Featured Image: Shutterstock/Mr.Alex M/Chuenmanuse


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