Prominent analyst Will Clemente is looking at the on-chain data of Bitcoin to see whether the BTC market is undergoing a major shift in trend.
In a new installment of the Blockware Intelligence newsletter, Clemente says that Bitcoin’s abrupt drop wiped out billions of dollars worth of leveraged positions.
“As one trader’s forced liquidation sale triggered the next trader’s stop-loss, roughly $1.23 billion of longs got liquidated, $622 million of which came from ByBit… In total, roughly $4.4 billion of perpetual futures open interest was wiped.”
According to Clemente, the drawdown that saw Bitcoin plunge from its 30-day high of $52,853 to a low of $43,285 is a much-needed breather to keep BTC’s uptrend sustainable.
“I view this as a healthy cleansing, especially when you get a view of how investors acted throughout the event.”
To support his long-term bullish bias on BTC, Clemente says the plummet gave investors the opportunity to buy over $1 billion worth of BTC at a discount.
“So has this event changed any of the broader trends that we’ve been following? The answer is no. In fact, these accumulation trends have only strengthened. Exchanges are down another 25,733 BTC ($1.18 billion) this week, reflected by our exchange supply shock metric. We also saw a spike in coins moving to strong hands reflected by our illiquid supply shock ratio this week, including a positive print on Tuesday. “
Clemente adds that whales – deep-pocketed investors in possession of more than 1,000 BTC – also bought the dip.
“In addition, we saw whales increase their holdings again this week. This metric takes all entities with over 1,000 BTC and then filters out known entities we’ve identified on-chain such as Grayscale, Purpose ETF, QBTC, and most importantly exchanges. In total, whales added 44,393 BTC ($2 billion) this week.”
Clemente highlights that Bitcoin is still largely bullish despite its tendencies to print large corrective moves.
“It’s easy to get concerned by these short-term moves, but I think it’s important to remember the broader picture is highly bullish.”
Follow us on Twitter,
Surf The Daily Hodl Mix
Featured Image: Shutterstock/Tithi Luadthong