The crypto market is officially over, and Bitcoin (BTC) will pump “tremendously higher” over the next 18 to 24 months, according to popular trading analyst and Reflexivity Study co-founder Will Clemente.
In a thread posted to Twitter on Wednesday, the trader highlighted various on-chain signals that crypto inflows are coming back, and BTC is due for a rebound.
Bitcoin’s Comeback
One bullish signal lies in Bitcoin’s “realized market cap” – the total value of all BTC in circulation at the price they were last moved at.
Back in May, the 180-day change in realized cap flipped positive, “signaling net inflows” according to Clemente. A similar trend is observable when looking at the price basis of long-term versus short-term Bitcoin holders, in which case short-term holders returned to a higher price basis over HODLers in March.
“Realized cap/price rising is important because it shows new money is coming in, but also that the price basis of the network is rising,” wrote Clemente. “The higher the price basis goes the higher the marginal trading price can go without creating a strong incentive for people to take profit.”
Stablecoin dynamics have also shifted: the total market cap for dollar-pegged crypto is back on the rise over the last 90 days, signaling growing investor appetite for synthetic dollars with easy access to the crypto market.
Between regulatory uncertainty and destabilized pegs for other tokens, this metric has been net negative for the past 1.5 years.
Aggregated Stablecoin Market Cap. Source: Will Clemente.
Don’t Get Too Bullish, Analysts Warn
After months of drifting close to $30,000, Bitcoin skyrocketed to over $44,500 per coin during November and early December. Among many theoretical catalysts for the asset’s climb is the expected approval of multiple Bitcoin exchange-traded funds next month, which will create an avenue for more institutional capital to enter the Bitcoin market.
“As we’re seeing early signs of capital inflows that is generally accelerated by an ETF, over 70% of Bitcoin’s circulating supply has not moved in >1 year,” Clemente wrote.
Though the fundamentals look great, Clemente warned that Bitcoin will undergo a series of leverage-driven price corrections on its way up.
On-chain analyst James Test issued a similar warning last week, noting that there is still room for plenty of investors to take profits at Bitcoin’s current price level. “A few months rest would allow investor price bases to re-acclimate above the Shapely Market Mean Price,” he claimed.
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