The supply dynamics of Bitcoin (BTC) will need to change in order to decouple from equities, according to popular on-chain analyst Will Clemente.
In a new Blockware Intelligence Newsletter, Clemente notes that BTC has demonstrated an “extremely high” correlation to the Nasdaq 100 recently.
“Below you can see the 1D correlation of BTC to [Nasdaq] reaching as high as 0.98. Whether Bitcoiners view BTC this way or not, the fact is that the broader market has been viewing [BTC] as a high beta asset, basketing it in with tech.”
For Bitcoin to move up in price, Clemente says it either needs tech to rebound or it needs to decouple from equities.
According to the analyst, a new breed of buyers is accumulating BTC at current prices, which he predicts will lead to the decoupling of Bitcoin and the stock market.
As evidence, Clemente compares a chart displaying the percentage of Bitcoin that hasn’t moved in a year with a chart tracking how far the Nasdaq is off its all-time high.
“What we see is that, despite the Nasdaq being down about 20%, an all-time high ~64% of Bitcoin’s circulating supply has not moved. To me, this illustrates the fact that there is a convicted base of long-term Bitcoin believers/HODLers out there utilizing BTC as a store of value despite unprecedented uncertainty in global markets.”
Clemente also notes that Bitcoin exchange outflows are surging. Additionally, whales have been accumulating BTC for a month, according to the analyst.
“I think the story of this bear market is the transfer of supply from correlation trading traditional finance entities to long-term convicted crypto natives, [high-net-worth] individuals, and forward-looking institutions. Once this supply transfer is complete, I suspect we can see a prolonged multi-week decorrelation at a minimum.”
Bitcoin is trading at $38,343.77 at time of writing, down 5.57% in the past 24 hours.
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