#592 Strong Hands Are Aggressively Accumulating Bitcoin w/ Will Clemente

Will Clemente is a Finance Major at East Carolina University. He has quickly become one of my favorite writers on all things bitcoin, including deep dives on various on-chain analytics. Subscribe to Will’s new email newsletter here: https://btcbywc3.substack.com/ In this conversation, we discuss strong hands accumulating, SOPR, Miners in China, and Will's new chart. ======================= Revolut is a finance app in the US and UK, that say they're the simplest way to access crypto. Sign up today at Revolut.com/pomp and make 3 card transactions to get $15, which you can exchange for any tokens Revolut supports. As usual, when you move your money from fiat to crypto your capital is at risk. See T&C's for details. Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Cryptocurrency services provided directly by Paxos Trust Company, LLC. ======================= With over $1B AUM, Amber Group is a world-leading crypto finance platform helping institutions and individual investors to buy and sell cryptocurrency, earn yield, manage risk and access liquidity. Amber App new users only - earn 16% APR on BTC, ETH and USD stablecoins! Click the link to sign-up now: https://www.ambergroup.io/?utm_source=10508 ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Will Clemente is a finance major at East Carolina University. He has quickly become one of my favorite writers on all things Bitcoin, including deep dives on various on-chain analytics. You can subscribe to Will's new email newsletter by clicking on the link in the description. In this conversation, we discuss a variety of different on-chain analytics, what's been going on with the price, who's buying, who's selling, and what Will thinks the on-chain metrics are telling us about the short-term to medium-term future. I really enjoyed this conversation with Will, as I do with all of them, and I hope you enjoy this one as well.

• 0:45Anthony Pompliano?

  Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Revolut. Let's go back to the basics for a second. I've partnered with Revolut, a finance app in the US and the UK that say they're the simplest way to access crypto. They're putting their money where their mouth is, too. You can sign up and make three card transactions and you'll get $15. That's right, $15. What can you do with the $15? You can exchange for Bitcoin or any of the other tokens Revolut supports. Yep, they are crypto-enabled. These guys have made it easier to get some skin in the game. As usual, when you move your money from fiat to crypto, your capital is at risk. So sign up now through revolut.com/pomp to get a $15 reward and put them to the test.

• 1:25Anthony Pompliano?

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• 2:10Anthony Pompliano?

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• 2:51Anthony Pompliano?

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• 3:34Anthony Pompliano?

  All right, let's get back into this episode. Will, I hope you enjoy this one.

• 3:37Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 4:06Anthony Pompliano?

  Alright guys, bang, bang, I've got Will here. What's going on, man?

• 4:10Speaker 02

  Not much, Paul. Just, you know, a lot going on this week in the market, so trying to keep up with everything.

• 4:17Anthony Pompliano?

  Absolutely. I think people are really, really enjoying these kind of overviews on-chain metrics. So let's just jump right into what we're seeing this week. It feels like, you know, price is kind of just oscillating back and forth between that like 30,000, 35,000. What are you seeing?

• 4:35Speaker 02

  Yeah, um, you know, in terms of price, it hasn't been so pretty. I think, you know, a lot of the TA guys are calling for lower prices. I think, you know, what we've been describing is still just kind of continued in terms of the accumulation that we've been describing. So that was kind of a, you know, a broader theme of what was in this week's newsletter. But, uh, yeah, I think, you know, price is kind of in decoupling from what the kind of fundamental, you know, investment behavior is showing. And, you know, perhaps, you know, this still is like we've been saying, it's just going to take out a little bit, uh, take a little bit longer than we had initially expected. But I still don't see any changes in kind of the reaccumulation that we've been describing.

• 5:19Anthony Pompliano?

  Absolutely. And it feels like really the big, big takeaway here is people are selling, price has been going down, but strong hands, the experienced market participants, they're just gobbling up all this Bitcoin. And one of the things that you wrote about was the illiquid supply change metric. So maybe talk about, just remind everyone what that metric is and then what you're seeing in it.

• 5:39Speaker 02

  Yeah, so, you know, this is a metric I think we've had in for the last two weeks. And it basically looks at the 30-day change between a liquid supply. So the way you can think of this is, you know, Willie Luke calls it the Rick Astley indicator. I kind of call it like the strong hands indicator. It's showing, you know, entities that have held Bitcoin for over 155 days would have statistically very low selling behavior. And so we're starting to see, you know, that continued trend of supply moving to those entities. On Monday, this got up to the thirty day change got up to ninety five thousand eight hundred. So yeah, still seeing a continuation of that trend.

• 6:24Speaker 02

  And then kind of like going off of that. I had, I've been working with Willie Wu a little bit. We've been kind of in touch over the last couple of weeks. But we we put together something called the the liquid supply ratio, which is pretty much is just a variant of that that a liquid supply metric. And so this is just a very simple ratio of liquid supply to a liquid supply. And so what you see in this, you know, when I presented the idea to Willie and he he charted it out. And so he he messaged me, he's like, you know, this is really interesting. You look at the ratio and it's it's showing what's called a bullish divergence,

• 7:05Speaker 02

  which the oscillator is making higher lows while price is of course making lower lows lately. But what that's showing is that, you know, strong hands are increasingly buying the dip. You know, more so, more so as we continue to go lower. But but prices is making lower lows. But this is like the most, I would say, most clear divergence that we've had since that big correction we had in in late January, early March. I mean, I'm sorry, early February.

• 7:34Anthony Pompliano?

  Got it. And then when you look at who the selling is coming from, if the strong experienced hands are buying up the Bitcoin, is all the selling coming from the young entities?

• 7:44Speaker 02

  Yep, and you know, this has been going on for, you know, a month now. We've been talking about how, you know, all the selling is coming from shorter term market participants. Actually, I've taken a look this morning at this chart, which actually wasn't in the newsletter, but it's called New Bull, but it's looking at short term entities. And that that's in like a deep capitulation as of yesterday, so. And as well, looking at sober, which is something that we talked about on the on the short term timeframe. That that's showing capitulation as well, especially from from short term holders. I actually just put something out kind of comparing, you know, the long short term holders over the last month. Last thirty days, long term holders have added five hundred seventy nine thousand nine hundred forty BTC.

• 8:29Speaker 02

  While short term holders have reduced their holdings by five hundred twenty one thousand nine hundred eighty three BTC. So. You have this offset now of of longer term holders out buying the selling from the short term holders. In the last week, these long term holders have added a hundred twenty thousand seven hundred thirty nine BTC. While short term holders have reduced their holdings by ninety seven thou- just over ninety seven thousand BTC. So you have this offset of over the last week. Long to- well, this is at the time of writing, it might be a little off the day after, but. Longer term holders are are offsetting the short term selling by over twenty thousand BTC. And, you know, this is something that we've talked about before, but, you know, either this resembles a few things. So, you know.

• 9:14Speaker 02

  After after the end of the bull market, so, you know, late, late twenty eighteen or late twenty seventeen or early twenty eighteen. And then obviously after the the twenty thirteen bull market as well. But then it also resembles kind of this mid consolidation, which, you know, took place in in mid twenty thirteen and then also kind of. This divergence you had in in late twenty sixteen where you had, you know, the the longer term holders coming in and and setting the floor. While some of those shorter term speculators, you know, freaked out, moved out of the market. So. That, you know, those are the, those are the other times where we've seen this divergence between the the short and long term holders.

• 9:55Speaker 02

  But this has been something we've tracking, been tracking for a while now. And, you know. I think the key takeaway here is for anybody that's that's in this asset, you know, for the long term. When you're looking at people who have been in this market, you know, they're they're stepping in here and saying. Bitcoin is, you know, a good deal right now and they're they're stacking really heavily. While the shorter term market participants, you know, the speculators are starting to get freaked out and moving out, which. You know, it's great long term, perhaps, you know. This isn't very great in, in, you know, very short term because you need, uh, I think, you know, some of those, those newer, um, speculators to come in and that's kind of what, um, drives the euphoric price runs we see.

• 10:37Speaker 02

  Um, and so that's, that's why, you know, we, we've seen this, you know, price correction and, and this, you know, what I believe to be a, a, a broader, uh, kind of consolidation. But yeah, I, I, you, you see a lot of, um, capitulation from the, from these short holders.

• 10:53Anthony Pompliano?

  Yeah. And it looks like one of the most fascinating parts of your analysis this week is the new entity growth is exploding. There's tons and tons of, uh, kind of new, uh, participants coming into the market. Uh, we don't know exactly who they are or where they're coming from, but they don't appear to be whales. These are all much, much smaller. So it's almost like aggregate growth of total new users is, uh, is exploding upwards. Uh, but they tend to be smaller rather than larger players at the moment.

• 11:20Speaker 02

  Yeah, exactly. Um, and so, you know, this metric's called, um, entities net growth. It's like a very technical term, I think. I would rename it, you know, net user growth. I think that would, um, ma- make it make a lot more sense for, you know, people that, you know, hadn't seen it before. Uh, but so essentially what this is, is it's looking at, you know, new entities coming on the blockchain and then subtracting, uh, those entities, that, that number, um, from, the amount that are, uh, the addresses that seem to be dormant, the, the entities that seem to be dormant. And also, sorry, flip that around. So the subtracting the entities that look like they're dormant from the, from the new entities. And then you get the net growth, right? Uh, and so you're seeing this big W shape, um, for anybody like looking at the news now.

• 12:03Speaker 02

  Like it's literally a W, big W on the chart. Uh, but I, I think a lot of this, like you said, is, um, retail. Because first of all, you know, we're, we're not seeing that uptick in new whales, which is, um, something I, I believe that we're going to need to see if we have any kind of, you know, large, uh, broader bull market continuation from here. But also when you just look at the, uh, the raw holdings by, you know, by, by the size of, of the entity. So, you know, Perhaps, you know, you can look at below one BTC, below five BTC, wherever you want to call that cutoff for retail. I would say, you know, anything below maybe, maybe 10 BTC, I think, you know, that's below, you know, three hundred ten, ten thousand dollars. I think, you know,

• 12:48Speaker 02

  they could consider that still retail investor. But, you know, all those, all those smaller entities, particularly the, the very smallest ones, under one BTC and, and below that, they're all stacking very, very heavily. You know, you see this chart, it's basically just going vertical in terms of the amount of supply that's being held by them. And meanwhile, you know, you aren't seeing this uptick in new whales. So I think a lot of this new user growth is, you know, new retail, you know, smaller holders, which of course is bullish for Bitcoin adoption, but, you know, not priced in the short term. I think it would be interesting to see how many of these new users are coming from Latin America, because I highly suspect that a lot of the, a

• 13:32Speaker 02

  lot of this big uptick is, is coming from them.

• 13:35Anthony Pompliano?

  Absolutely. Well, anytime that you see a kind of headlines, right, in a certain geography, it's basically a marketing campaign for user acquisition. We see this in the traditional world, even things like Robinhood, right, where there was tons and tons of issues with their app, they shut down the service, everyone was yelling and screaming, they actually gained users during that period, even though people were kind of yelling at them. And so it's kind of the Streisand effect, and I'm assuming that's happening here in Latin America as well. Let's move on to Sopra. I feel like every week, everyone wants to know what is going on with Sopra. So what, what are you seeing there?

• 14:07Speaker 02

  Yeah, Sopra was interesting. So at the time that I wrote this, we saw this big higher low in Sopra. So I had put in the letter that it was a, it was a big bullish divergence where, you know, the oscillator is making a higher low, price is making lower low. And the last time we had seen a, a big divergence like that was once again in, in late January. But actually checking it when I woke up this morning, there's a big drawdown in, in Sopra yesterday. And particularly, you know, breaking that down between, you know, long-term and, and short-term entities,

• 14:42Speaker 02

  It is coming from the short term holders. So it seemed like yesterday we had a lot of capitulation because these metrics are updated at eight thirty every every night my time Eastern time. So it it seemed like yesterday we had a lot of capitulation from the short term holders and that bullish divergence that I had put in the newsletter is now invalidated because we no longer have that have that higher low. So.

• 15:06Anthony Pompliano?

  It's fascinating to watch this stuff literally change, you know, in twelve hours, twenty four hours so aggressively. Glassnode's got this new metric, a stablecoin supply ratio oscillator. Explain a little bit about what this metric is kind of really getting at and then kind of what you're reading in the in the metric itself.

• 15:25Speaker 02

  Yeah, so, you know, th- this was a metric created by Willie Wu that Glassnode had just recently put in there. The way you can think of this is just like the amount of the amount of stablecoins that are kind of sitting on the sideline versus, you know, like, are they moving back into the market or not? And so you see right now, we're kind of moving out of this zone that previously has kind of marked this big bottom capitulation bottom. And you're, you know, you're now starting to see some of that capital rotate back into the market. And so, you know, we we've only had stablecoins for, you know, the latter half of Bitcoin's existence. So the chart only goes back to late twenty eighteen. But the the other times that this resembles, you know, the the drawdown in in the oscillator and, you know,

• 16:09Speaker 02

  us moving back up out of this, out of a, you know, zone that we're in. It also resembles late twenty eighteen, the the March, the big March crash we had last year. And then also on that that late September drawdown that we had right before, you know, the big run up at the end of last year as well. So, yeah, we're starting to see, you know, we've been talking about for a while, for a few weeks that, you know, we had a lot of stablecoins that were just kind of sitting on the sidelines, right? And we hadn't seen them necessarily move back into the market, but they were there. Perhaps, you know, just waiting for a better entry point. But we are, you know, as of this week, starting to see that capital in the in form of stablecoins start to rotate back into the market, which is, you know, a good sign of recovery.

• 16:51Anthony Pompliano?

  For sure. One of the charts that to me is like just hitting us over the head and how obvious there was a change in early June is this miner net position change. And I think that right around that time is when the crackdown on miners in China started. So maybe talk a little bit about what you're seeing there with with miners and kind of what they're doing.

• 17:11Speaker 02

  Yeah, this is, this is interesting. So, um, well, first of all, like when you just look at the hash rate, you know, hash rate's pretty much just dropped off a cliff. We're now at the lowest point that we've been in, in terms of like daily average hash rate, uh, in over a year. So, yeah, you can definitely see, um, in the data that I'm looking at, um, that, you know, a lot of that hash rate is, is migrating out from China, um, and has temporarily, um, been taken off the network. Of course, we have, you know, a, uh, the difficulty adjustment coming up right around July 1st. Um, so that'll be, that'll be great when that, that finally occurs. But for now, yeah, we're, we're stuck with, you know, a lot of, a loss of hash rate and difficulty hasn't adjusted yet. But, um, in terms of like the, the raw holdings of miners, um, I think this is interesting because

• 17:55Speaker 02

  a lot of, um, a lot of the selling has been believed to, to have come from miners. Um, but what I'm seeing in at least the data that I'm looking at is not, not so much because they've reduced their, their balance by, you know, just over 5,000 bitcoins, so 5,125 at the time of writing. I think it might be up by like 50 BTC or something since I wrote this two days ago. Um, but yeah, it's, I mean, they are selling like, right? Like they are reducing, um, their holdings, but not, um, on any magnitude that would have, you know, a significant impact on, on price. Because, you know, the market can absorb 5,000 BTC with, with really no problem unless it's, you know,

• 18:36Speaker 02

  sold in a very short period of time. But, uh, you know, it's not anything that I think, I don't think, um, the, the miners themselves are responsible for this drawdown. In, in terms of, you know, just looking at how many bitcoins have been sent out of their wallets to exchanges, presumably to be sold. So, uh, they're, they're definitely selling though, but just not, uh, and, and what I'm looking at on, on any extent that's going to draw the market down to 30K.

• 19:01Anthony Pompliano?

  For sure. Uh, before we let you go, you've got a new metric, uh, that you created. You've currently titled it the OTC Desk Outflow Stock RSI Signal, which is a horrible-

• 19:14Speaker 02

  It's a mouthful.

• 19:15Anthony Pompliano?

  You know that that's a horrible name. I think, uh, we, we got a recommendation from somebody that we should just call it the Clemente Signal. I don't know if you want to do that or not. We'll leave that up to you. But talk a little bit about this brand new, uh, kind of signal that you've created and what exactly you're trying to look for in it and what it's telling us right now.

• 19:33Speaker 02

  Yeah, so I think, you know, when you're in a market like this, the, you know, the money that's really pushing the market around is, you know, the big money, right? So I was thinking, you know, kind of from first principles, well, how can I track, you know, that, that big money? And so I was like, okay, well, big money goes through OTC desks, right? Most of the, most of the entities going through OTC desks are like high net worth individuals, institutionals, those, those kinds of entities. So I, I looked at, you know, the, the OTC outflows. And, and when you, when you just look at that chart itself, it's very noisy. You see up, down, and up, down, up, down. Almost looks like, you know, when you're looking at like a chart of like a, someone's heartbeat when it's like going crazy. There's really, you can't really draw any major signal out of that.

• 20:18Speaker 02

  And so what I did was, you know, Glassnode has just added, they have this tab on the top where it says trading view. And you can, you can use different indicators, basically adding, you know, traditional TA indicators to some of these on-chain metrics, which, shout out to Raphael, because, you know, this, this is pretty sick. I've been playing around with this all week. They just added this in. So when you, I, I added a, a stock RSI to this, which basically looks at the strength of, of the metric. And so when you, when you plop this out, you, you get, you know, a kind of this range that Bitcoin, you know, the, the metric trades in usually.

• 20:56Speaker 02

  But then when you have a breakout to the upside, it's a, it's a buy indicator because it's showing that there's really strong, the trend of, of OTC outflows is really strong. And then conversely, when it breaks out to the bottom of this range, it's been a, it's been a sell indicator. And so, you know, that's showing that there's not many OTC outflows, AKA there's, there's not a lot of, you know, high net worth institutional buying going on, AKA, you know, big money. So you, you see, you know, it's, it's been a little over 90% accurate, aside from one missed buy signal. But, and, and this is just backtested over, over the last year. To be honest, I haven't backtested it over like the previous bull market. This is just over the last year.

• 21:39Speaker 02

  So that 90% number might be give or take, but, um, yeah, over, over the last. Last year, it's it's been very accurate. Um, you know, it's it's timed right before the the buy right before we had that run up in September. Um, you know, several buy indicators on the way on the way up. Um, and then it flashed another buy signal after the January capitulation. And actually, um, timed the one of the tops in in March really well, like almost to the tick. Um, timed the, you know, the the dip we had after that, um, another dip in in late April. Um, and then it also flashed a big, uh, sell signal right before we had that initial big drawdown to thirty K. So, you know, if you were using this indicator and going off of this, then, you know, you would have been in good shape if you had if you had sold right before.

• 22:22Speaker 02

  Um, you know, we had that big drawdown when it flashed this sell signal. So, uh, interesting, it it it just flashed, um, a buy signal, which we'll see how that plays out. Um, you know, over the next few weeks, but, uh, yeah, this is, I'm trying to, I'm trying to play around with some with some new stuff because Boston just added this, uh, this trading view tab where you can kind of create your own metrics. Um, so yeah, this is the first one I I've come up with. Hopefully I have some, uh, new stuff for the audience over the next few weeks.

• 22:48Anthony Pompliano?

  It's awesome. I think you're doing a a fantastic job. Before I let you go, uh, where can we send people to find you on Twitter or or find out the newsletter?

• 22:56Speaker 02

  Yeah, so, um, I have, um, I'm gonna get a URL for this. I don't have to to say this mouthful every time, but I on my Substack is, uh, BTC by WC three, uh, dot Substack dot com. And then, like I just said, I'll I'll try to get a URL. So you don't have to type in all that. And then you can just type it in something quick and just get right to it, recommended by Pomp. Uh, so yeah, you can find me on there on Twitter all day long. You know, just putting out stuff, whatever I find interesting or, you know, if you tweet at me, I'll, you know, engage with you, whatever. I'm just, you know, on Twitter hanging out. So feel free to reach out. DMs are open, all that, so.

• 23:30Anthony Pompliano?

  Awesome, man. Well, listen, I think, uh, the the big takeaway from this week is, you know, all the short term market participants, they're selling, uh, the long term experienced, strong hands, they're buying. Uh, there's tons and tons of insights in, uh, in these on-chain metrics. So I appreciate you spending so much time into the audience as well. In terms of, uh, breaking this stuff down, it definitely kind of, uh, provides some signal, uh, insight of all the noise and the sentiment. Because, you know, Twitter, Twitter was not very happy. There are a lot of people very, very bearish on, uh, on Twitter over the last couple of weeks. So, uh, keep at it and then we'll do this again next weekend.

• 24:06Speaker 02

  Thanks, Fong. Yeah, I think, you know, a lot of people freaking out. I think maybe this is their first rodeo. Yeah.