#1266 Will Clemente | Bitcoin Bear Market Is Over. Here Is Proof.
Oct 26, 2023
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In this podcast, Will Clemente, Co-founder of Reflexivity Research, discusses the bitcoin market, ETF speculation, and various metrics. They explore the reclamation of moving averages by Bitcoin, the potential effects of ETF approval on its price, the MVRV Z score in evaluating Bitcoin's value, and the rising interest of financial institutions in Bitcoin.
Bitcoin dominance has increased due to risk-off sentiment, geopolitical uncertainties, and ETF speculation, indicating a potential end to the bear market and a transition into a bull market.
ETF approval could result in significant capital inflows from institutional investors, estimated to be around $35 billion in the first year, and could have a substantial positive effect on Bitcoin's price despite short-term volatility.
Deep dives
Bitcoin Dominance and Market Strength
Bitcoin dominance has been steadily increasing, indicating its relative strength compared to other cryptocurrencies. This can be attributed to a general risk-off sentiment in the broader market, geopolitical uncertainties, and speculation regarding ETF approval. The market cycle for cryptocurrencies often starts with Bitcoin leading the way, followed by liquidity dispersing into riskier assets. Bitcoin has reclaimed important technical levels, such as the 200-week and 200-day moving averages, suggesting a potential end to the bear market and a transition into a bull market.
The Impact of ETF Approval on Bitcoin
While the short-term impact of ETF approval may result in a sell-the-news event, the long-term implications are positive. ETF approval would allow institutional investors that face regulatory compliance restrictions or lack access to Bitcoin to enter the market. Large financial organizations acting as sales forces for Bitcoin could drive significant capital inflows. Galaxy Digital estimates potential inflows of $35 billion in the first year and $75 billion in the subsequent two to three years. Despite short-term volatility, the ETF approval could have a substantial positive effect on Bitcoin's price.
Evaluation Metrics and Bitcoin Trends
Various evaluation metrics, such as MVRV Z-score and long-term holder supply, provide insights into Bitcoin's market trends. MVRV Z-score analyzes the ratio between market value and realized value, indicating market sentiment and potential points of overvaluation or undervaluation. Currently, Bitcoin is not overheated, but it is far from being undervalued. The supply of Bitcoin held by long-term holders is increasing, reflecting strong belief and tight holding patterns. Additionally, the MVRV ratio and long-term holder supply indicate that Bitcoin is still relatively undervalued compared to historical market cycles, suggesting potential for future price appreciation.
Will Clemente is the co-founder of Reflexivity Research. In this conversation, we talk about bitcoin, why the price has gone up, ETF speculation, various metrics, bitcoin halving, and more.
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