#1065 Will Clemente On Why He Feels Optimistic About Bitcoin
7/30/2022 · 26 min · transcript via mlx
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Key topics
— Bitcoin reclaimed the 180-week exponential moving average, a historically significant level that has marked macro bottoming areas and indicates potential trend reversal after months of downside.
— The Federal Reserve raised rates by 75 basis points while signaling a slower pace ahead, and a second negative GDP print suggests the market is pricing in a potential pivot or pause in rate hikes, creating a window for a bear market rally.
— USDT and USDC stablecoin market cap relative to total crypto market cap has rolled over from multi-month highs, indicating dry powder is beginning to deploy into the market rather than sitting on sidelines.
— The MVRV Z-Score returned to the green zone, historically marking multi-year accumulation opportunities where averaging in has proven profitable in hindsight, though retests of lows remain possible.
— Three-month Bitcoin futures basis has recovered slightly and shown backwardation, reducing extreme speculation compared to prior bull markets and suggesting more measured market structure during the current rally.
— Short-term holder cost basis at $28,000 serves as both a value and momentum indicator; reclaiming this level could signal a trend change for momentum-based market participants.
Market & price signals
— Bitcoin is trading around $20,000+ after reclaiming the 180-week exponential moving average and approaching the 200-week moving average. Short-term holder cost basis sits at $28,000 (down from $53,000 at the December 2021 peak), with confluence to daily price structure. The three-month futures basis recovered to 2.57% from lows of 0.27%, while remaining well below historical highs of 40–45%, indicating muted speculation. Funding rates remain slightly positive but have shown pockets of negativity. The MVRV Z-Score entered the green zone, traditionally signaling extreme value. Stablecoin market cap dominance is rolling over from multi-month highs, suggesting capital deployment is beginning. Clemente noted a historically high probability of retesting lows by year-end, though the market has recovered key technical levels.
Actionable insights
— Wait for Sunday 8 PM Eastern close to confirm whether Bitcoin has successfully reclaimed the 180-week and 200-week moving averages; wicks above can fail to close above these levels, and high-timeframe trend-based participants should prioritize candle closes over intraday moves.
— Continue averaging into spot Bitcoin while the MVRV Z-Score remains in the green zone and the 200-day deviation remains extreme, as this regime has historically marked the best multi-year buying opportunities; consider adding more aggressively if the indicator retests those lows again before year-end.
— Monitor the short-term holder cost basis at $28,000 as a confirmation signal; if reclaimed and held, it suggests a momentum-based trend change similar to early 2019, while funding rates turning increasingly negative during rallies would provide higher conviction for a sustained reversal.
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