Closely-followed analyst Will Clemente says that Bitcoin is wildly oversold based on on-chain metrics.
In a new Pomp Podcast interview, the analyst highlights that he’s seeing on-chain signals indicating that long-term holders are aggressively buying the dip.
“What we’re really seeing is all the coins that are being sold are from very young wallets… A lot of the selling has come from the short-term holders… The key thing to look at here is the short-term holders, and this is a process that started last week, had now been offset by long-term holders buying. The short-term holders [selling] had been offsetting the [buying] from long-term holders over the last three or four weeks, but now that’s starting to rotate back into the favor of long-term holders.”
Clemente is also looking at a specific on-chain metric telling him that market participants are beginning to accumulate BTC as the leading crypto asset hovers around the $32,000 level.
“The metric that I threw in there is called exchange net position change, and that is the 30-day change in the exchange balance from 30 days ago until now. That had been way up as we sold off, but it’s been trending down over the last two to three weeks. But now finally, it moved into the red zone. That’s showing negative exchange flows which is showing accumulation because people are moving coins off of exchanges.”
According to Clemente, the on-chain signals suggest that Bitcoin is still in the middle of a bull market as long-term investors continue to scale into the top crypto asset.
“Bitcoin is deeply undervalued in the eyes of experienced market participants, and they are starting to buy discounted BTC. When you’re in an asset like this, you should watch the people that have been in [the market] for a long time: what they’re doing, how they’re behaving. This is showing in aggregate that the people that have been in the market the longest are buying right now very heavily.”
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