Renowned on-chain analyst Willy Woo has suggested that Bitcoin (BTC) has the potential to reach its all-time highs again if the current trend of capital inflows continues. He advised investors to see price declines as healthy corrections and buying opportunities rather than indicators of an imminent market crash.

Woo shared his observations in a detailed thread on X (formerly Twitter), emphasizing that Bitcoin's bullish momentum is supported by strong fundamentals. The increasing capital inflow into the Bitcoin network, combined with stabilizing total and speculative capital flows, are creating a positive environment for the asset.

He pointed out that Bitcoin's liquidity is deepening, as shown by his declining Risk Model, indicating improved market liquidity. This trend suggests that future price drops may be less severe, reducing the risk of sharp sell-offs.

While stating that Bitcoin has already met medium-term price targets and formed a new interim target, Woo highlighted the importance of sustained capital inflows in supporting these levels. He cautioned about short-term challenges, noting that Bitcoin's current price is considered overextended based on the Volume Weighted Average Price (VWAP) metric.

Woo suggested that Bitcoin's upward momentum might be limited in the near term, with sideways movement or a gradual increase being more likely outcomes. Despite potential short-term obstacles, signals like Bitcoin's inverse relationship with the US Dollar Index, decoupling from the NASDAQ, and increasing accumulation by long-term investors point towards a potentially major rally in the future.

Recent data from BeInCrypto showed a 7.7% price recovery for Bitcoin over the past week, with the current trading price at $94,125, reflecting a slight drop over the last day.