#620 The Bitcoin Supply Squeeze Thesis With Will Clemente
7/31/2021 · 29 min · transcript via mlx
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Key topics
— Whales and institutions are actively accumulating Bitcoin while newer market participants continue to sell at losses during the reaccumulation phase.
— On-chain metrics have strongly diverged from price for two to three weeks, but are now reconverging; historically such divergences precede significant price movements once information reprices.
— The newly created 365-day RSI metric tracking illiquid supply has flashed a buy signal after full capitulation in late May, with vertical accumulation momentum unprecedented in Bitcoin's history.
— Exchange outflows remain aggressive, with coins being rapidly withdrawn from exchanges and moved to cold storage or custody, signaling strong buying intent and reduced selling pressure.
— Miners have accumulated Bitcoin for almost two months following difficulty adjustments and hash rate drops, boosting profitability and reducing sell pressure from this key supply source.
— Net realized profit has turned positive again as coins move back into profit territory, reducing the risk of capitulation selling from long-term holders.
Market & price signals
— Bitcoin traded in a $30,000–$40,000 range during the reaccumulation phase following the May capitulation event. Nine consecutive daily green candles have appeared, reflecting renewed buying momentum. The SOPR (Spend Output Profit Ratio) has moved back above 1.0 after trading below it for an extended period, indicating coins are trading in aggregate profit; a 5–10% price correction bouncing off this level would signal re-entry into bull market conditions. Realized profit spiked to $2.4 billion on Tuesday, driven primarily by coins bought in the recent $30–$40k range rather than long-term holders exiting. Miner reserves remain elevated and accumulating despite previous capitulation selling in May.
Actionable insights
— For long-term Bitcoin holders, on-chain metrics provide valuable directional awareness of broader market cycles and investor behavior without requiring active trading; free resources like Glassnode's newsletter and Academy and Will Clemente's BTC by WC3 newsletter offer accessible entry points.
— Strong confluence across multiple analytical approaches—on-chain accumulation, technical tightness in volatility, and supply squeeze indicators—represents the highest-conviction setup for position-building; watch for 5–10% corrections that hold above SOPR 1.0 as confirmation of bull market resumption.
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