Closely followed Bitcoin analyst Will Clemente says that some bullish fundamental factors are developing behind the scenes for BTC.
The popular analyst shares data from Glassnode with his 605,000 Twitter followers showing that the majority of Bitcoin’s supply has remained untouched for at least one year, very close to an all-time high for this metric.
“63.15% of Bitcoin’s supply has not moved in at least 1 year.
This is just 0.3% shy of an all-time high.”
In the latest Blockware Intelligence newsletter, Clemente says that one of the main forces fueling the accumulation of Bitcoin is the Luna Foundation Guard’s (LFG) initiative to acquire billions of dollars worth of the top crypto to create a BTC-backed stablecoin reserve.
“Aside from the correlation to risk on equities, another driver of capital inflows has been the Luna Foundation Guard accumulating a Bitcoin reserve; both directly, as well as through front-running and general narrative momentum. LFG now holds 30,727 BTC, roughly $1.5 billion at current market prices.”
The analyst says that short-term holders (STHs), or investors who have held onto their BTC for less than 155 days, are almost back in profit on average. He adds that bullish momentum could be confirmed if price spends more time above the average short-term holder realized price, which is around $46,000.
“For the time being, Bitcoin is back above short-term holder realized price, a psychological level we have spoken about time and time again. Would like to see more than one daily close above this to feel confident in momentum continuation.”
Clemente also points out that much of the Bitcoin derivatives market is trending towards being collateralized with stablecoins instead of crypto, which he says can prevent sudden volatile moves to the downside since traders are utilizing steadier collateral compared to BTC.
“One macro shift that is notable in the Bitcoin derivatives market is the percentages of futures open interest collateralized with crypto versus stablecoins. This creates a healthier backdrop for the market. Why? When longs are collateralized with BTC, they have a negative convexity; meaning as price goes against them, not only does their PnL (profits and losses) decrease but the value of their collateral as well. With stablecoins as collateral, this effect is no longer there.”
At time of writing, Bitcoin is exchanging hands for $46,330.
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