#1057 Will The Bitcoin Rally Continue? - BTC On-Chain

Today's episode is my weekly Bitcoin on-chain analytics update. I go through the Blockware Solutions newsletter and various other metrics to help you understand the state of Bitcoin, why the Bitcoin price rallied up this week, and if this rally will continue. To see the full video with the corresponding charts referenced throughout the interview, go to the Anthony Pompliano YouTube Channel ======================= The number one name in NFT domains and the world’s most powerful wallet are teaming up to bring something new to the crypto and Web3 world: That’s right, Unstoppable Domains and Blockchain.com partnered to create NFT domain names ending in . Blockchain. It’s the perfect ending to show that you’re a believer in a decentralized future. The Blockchain.com community can get one, for free by signing up for the waitlist here. Free NFT domains provide all the benefits of premium Unstoppable Domains, including fee-free, lifelong ownership. Don’t have a Blockchain.com wallet? No worries, these new domains are available to everyone for as low as $5. Either sign up for a free blockchain.wallet or visit Unstoppabledomains.com to buy your domain today. ======================= Valour (formerly DeFi Technologies) represents what’s next in the digital economy -- providing simplified, trusted access to crypto, decentralized finance and Web 3.0 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols, through a single stock purchase on a regulated exchange. Currently listed on U. S. (OTC: DEFTF) and Canadian (NEO:DEFI) exchanges. For more information or to subscribe to receive company updates and financial information, visit our website at valour.com =======================

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. In this episode, I break down the past week in Bitcoin, including on-chain metrics, various tweets that I find interesting, and any other information that I think will help you get up to speed on what's actually occurring in real time. I really enjoy these episodes, and I hope that you guys enjoy them as well. Before I get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by FTX US. FTX.us is the safe, regulated way to buy and sell Bitcoin and other digital assets. You can trade crypto with up to 85% lower fees than top competitors. There are no fixed minimum fees, no ACH transaction fees,

• 0:46Anthony Pompliano?

  and no withdrawal fees either. FTX.us is also the only leading exchange that supports both Ethereum and Solana NFTs. Download the FTX app today and use referral code Pomp to earn these free crypto on every trade over $10. The more you trade, the more you earn. Go download the FTX app today and use referral code Pomp. Today's episode is brought to you by Unstoppable Domains. The number one name in NFT domains, and the world's most powerful wallet, are teaming up to bring something new to the crypto and Web3 world: your name dot blockchain. That's right, Unstoppable Domains and blockchain.com partner to create NFT domain names ending in . blockchain. It's the perfect ending

• 1:27Anthony Pompliano?

  to show that you're a believer in a decentralized future. The blockchain.com community can join a short waitlist to get one for free at www.blockchain.com/waitlist/blocchain-domain. Free NFT domains provide all the benefits of premium Unstoppable Domains, including fee-free lifelong ownership. Don't have a blockchain.com wallet? No worries, these new domains are available to everyone. Either join the waitlist for a free blockchain.com domain, or visit unstoppabledomains.com to buy your domain today, starting as low as $5. This episode is brought to you by Valor. Valor represents what's next in the digital economy. They provide simplified trusted access to crypto, decentralized finance, and Web3 investment

• 2:10Anthony Pompliano?

  Opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols through a single stock purchase on a regulated exchange. They're currently listed on the OTC at DEFTF and on the Canadian NEO exchange at DEFI. For more information or to subscribe to receive company updates and financial information, you can visit their website at valour.com. That's V A L O U R dot com. valour.com. Go check them out today.

• 2:43Speaker 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.

• 3:07Anthony Pompliano?

  What's going on, guys? Hope you had a great week. Bitcoin's starting to rebound a little bit, bringing some more enthusiasm back into the market. But the question is, will this last or will it not? We're going to go ahead and get into all the on-chain metrics along with many of the market dynamics. Don't forget, these weekly on-chain metrics are brought to you by FTX. I'll tell you more about them at the end. All right, let's get into this week's update. Let's see what exactly is going on with Bitcoin and will this survive? To get started, first, we can see that Bitcoin is now trading at over $23,000, definitely recovering from some of the past week's price levels. Then if we take a look at the Bitcoin network itself, the current market cap is $436 billion. We can see that more than 90% of the supply has been issued and the inflation rate remains at 1.76%. The

• 3:49Anthony Pompliano?

  real exchange volume over the last 24 hours is just over $5 billion and the miners have been paid $21.2 million in 24-hour period to continue to secure the most decentralized, secure network in the world. Bitcoin is down 66% from its all-time high, but it's up about 32% or so from the recent lows. Then if we compare Bitcoin, gold, and the S and P 500, we see that Bitcoin is down 30% over the last 12 months, gold and the S and P down as well. But over the last two to 10 years, Bitcoin has drastically outperformed. Either one of these assets. Next up, we can take a look at Bitcoin's price closing history, currently sitting at that $23,000 mark, meaning that for 88% of Bitcoin's life, if you had bought it and held till today, you'd be in profit.

• 4:32Anthony Pompliano?

  And only about 12% of the time or so, if you had bought it and held till today, you would be underwater. Then if we take a look comparing Bitcoin to gold, S and P 500, NASDAQ and TLT, we can see that the compound annual growth rate of Bitcoin at 120% is drastically outperforming any of the other assets. Bitcoin's sharp ratio sitting at 1.03 over a five-year period, meaning that if you put Bitcoin into a diversified portfolio, it ends up having an incredible advantage over most of these other assets. Next up, we can go take a look at the Blockware newsletter, put together by Will Clemente and the team over there. They do a fantastic job of this every week, and I highly suggest that you check it out. First up, we've got Bitcoin reclaiming the 200 weekly moving average.

• 5:13Anthony Pompliano?

  This has been Bitcoin's largest weekly candle since April, when the Luna Foundation Guard built up their Bitcoin reserves. But that's not good enough to simply clear over that 200 weekly moving average. Will points out that Bitcoin has seen one of its furthest deviations from that 200-day trend in history. The only times it's ever been this far below are highlighted in the green here. Then we can go take a look at the daily price structure perspective. Bitcoin pushing along the range has traded in for the last month and has retested both the point of breakout as well as that 200-week moving average. At the time of this writing, price looks good for continuation to the levels above, but invalidation of this idea would be price going back down into the range. Next up, we can see that the $28,000 mark is resistant, but also aligned with an underside

• 5:58Anthony Pompliano?

  retest of short-term holders' cost basis. That occurrence has happened four times in 2018 on the way down. The psychology of this is that whenever the cost basis is retested, market participants who are underwater will look to exit the market at breakeven. Will and the Blockware team, they go on to look at the order books first, coming up with Coinbase, pointing that there is a very big skew to the bid side, and there are no major visible clusters of asks above the 20,000 mark. You can also see that there's a gap in volume, showing the selling on the way down is very inefficient due to forced selling and thus there is not much overhead supply in that area. Will then points out that the FTX spot shows a very similar profile as well.

• 6:39Anthony Pompliano?

  Moving on to the derivatives, we see that the perpetual swap open interest continues to climb in both absolute and relative terms, indicating a decent sized buildup in futures contracts over the last few weeks. And then, looking at the funding rates as a gauge for positioning aggression, they see a mixed regime for the last month, indicating a lack of conviction of expectations from the market in aggregate. Lastly, we can go take a look at Bitcoin's correlation. You can see the correlation of the federal funds rate maintains to be almost perfectly inverse, pairing this with its correlation to M2 money supply, highlighting how Bitcoin is a hedge against monetary debasement. And then Bitcoin's correlation to the NASDAQ also remaining freakishly high. From the on-chain side of things, one metric that they haven't been talking about over the last few weeks is long-term holders.

• 7:25Anthony Pompliano?

  Those long-term holders are under pressure to a degree that has only taken place a few times before, during the 2012 bear market, 2015 bear market, 2018 bear market, and right now. Will defines this as when prices below long-term holders' cost basis and when coins are being spent by long-term holders below the price that they acquired. Another thing that Will hasn't touched on recently is the ratio of stable coins market cap relative to the aggregate crypto market cap. Whenever the lower bound of this trend line is tagged, it shows that a lot of capital has been deployed into the market and there are few new marginal buyers left. Conversely, whenever the ratio reaches the top of the channel, it indicates macro bining and accumulation levels. So far, the ratio has worked well and is starting to roll over,

• 8:07Anthony Pompliano?

  indicating that the crypto market cap is growing faster than stables on a relative basis. One interesting point that Will concludes with is that there's actually been a flipping on the exchange side, according to Glassnode. Binance now has dethroned Coinbase for having the most spot Bitcoin on their platform. Make sure that you go and you subscribe to the Blockware newsletter. You can see the links in the description or go follow Will and the rest of the team on Twitter. They're doing fantastic work and I continue to learn a ton from them. That's it for this week's update. I hope that you enjoy these. They're really fun to put together and I learned a ton as I continue to get work through all the data. Don't forget that these are brought to you by FTX. You can go and click on the link in the description to learn more about FTX US. They've got very low trading fees, sometimes as much as 85% lower than their competitors.

• 8:50Anthony Pompliano?

  They also have introduced brand new digital stock trading, which allows you to buy and sell stocks right next to crypto in your same account. That digital stock trading comes with no transaction fees and no payment for order flow, meaning they continue to pursue best pricing. Go check out FTX US today. You can click on the link in the description. FTX, one of the most innovative companies in the space, continuing to push forward all the technology, all the infrastructure that will lead to more and more adoption. That's it for this week. I'll see you all next Saturday.