Here’s What It Will Take for Bitcoin To Break Away From Stock Market and Rally, According to On-Chain Analyst Will Clemente


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.”

Source: BlockwareIntelligence

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.”

Source: BlockwareIntelligence

Clemente also notes that Bitcoin exchange outflows are surging. Additionally, whales have been accumulating BTC for a month, according to the analyst.

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“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.”

Source: Glassnode

Bitcoin is trading at $38,343.77 at time of writing, down 5.57% in the past 24 hours.

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Featured Image: Shuttersock/Vadim Sadovski



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