#580: Will Clemente on the Re-Accumulation Phase Is Almost Over

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 onchain analytics. Subscribe to Will’s new email newsletter here: https://btcbywc3.substack.com/ In this conversation, we discuss strong hands accumulating, futures open interest, miners selling, the re-accumulation phase, and bitcoin price action. ======================= 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.

• 0:00Anthony 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 strong hands accumulating, futures open interest, miners selling, the reaccumulation phase, and Bitcoin price action. I really enjoyed this conversation with Will, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Revolut. Back to the basics for a second.

• 0:42Anthony Pompliano?

  I've partnered with Revolut, a finance app in the United States and the UK that say they're the simplest way to access crypto. And now they're putting their money where their mouth is. You can sign up today, make three card transactions, and you'll get $15 for free. That's right, 15 bucks. What can you do with the $15? Well, you can exchange it for Bitcoin or any of the other tokens Revolut supports. Yes, Revolut is crypto-enabled. They've been really popular in Europe, and now they're coming to the United States, so make sure you go check them out. 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's at risk. Go sign up now through revolut.com/pomp to get a $15 reward and put them to the test.

• 1:22Anthony Pompliano?

  Again, revolut.com/pomp to get $15 reward. Go check out revolut.com/pomp today. Next up is Amber Group. With low yields and looming risk of inflation around the world, it's no question crypto is the alternative. With Amber App, you can easily earn high yields on your crypto assets. Amber App is an all-in-one crypto finance app designed to help you earn, swap, trade, and invest in crypto. You can earn interest instantly simply by depositing assets to your wallet, and you receive daily interest payouts. This means earning interest 24/7 with no lockup. You can also customize fixed-term investments between 1 and 360 days to enjoy higher yields with flexible redemptions. Right now, new

• 2:03Anthony Pompliano?

  users can earn up to 16% APR on Bitcoin, Ether, and USD stable coins. Whether you're a long-term holder or trading on Market moves on Amber app, you can earn interest on your own terms and do more with your crypto. Make sure you go check them out by clicking on the link in the description today. Amber group where you should go figure it out. Go check them out. Click on the link in the description. Next up is my friends at L max digital. They're the number one institutional crypto exchange, offering clients the deepest pool of crypto liquidity on the planet. And it's underscored by 100% uptime track record through volatility spikes. Leveraging L max groups liquidity relationships and ultra low latency technology. L max digital is the market leading solution for institutional crypto trading and custodial services.

• 2:47Anthony Pompliano?

  They feature a central limit order book streaming spot Bitcoin ether, Litecoin and Bitcoin cash, all paired with US dollar, Euro and yen. Just cross connect at equinex LD4 or over the internet to execute your crypto trading strategy with precision. L max digital, the number one institutional crypto exchange. If you need liquidity, if you need a deep, deep pool of that liquidity and you're an institution, you should be using L max digital. They're secure, they're liquid and they're trusted. Learn more at L max digital.com slash pomp. Again, L max digital.com slash pomp. All right, let's get into this episode with Will. I hope you enjoy this one.

• 3:27Speaker 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.

• 3:55Anthony Pompliano?

  All right, guys. Bang, bang. I've got Will here. We're going to go over on chain metrics every single Saturday. Will, what's going on, man?

• 4:02Speaker 02

  Not much. Just taking it easy and enjoying the hot weather. How about you, Paul?

• 4:07Anthony Pompliano?

  I'm doing well, buddy. All right, let's get into it. Bitcoin seems to be just ranging still, but it looks like there's a whole bunch of stuff that you've been able to take out of the on chain metrics for this week. So where do you want to start?

• 4:19Speaker 02

  Yes, I guess we could just kind of start with the price action. I think we had kind of a funny week where we just kept ranging sideways. You know, last week we had talked about how we were just kind of sitting in this range between 32 and 40K. And we had kind of drawn this this triangle pattern, which I saw a lot of other traders on Twitter were looking at as well. And I bring this up because we finally had a breakdown out of that. Which was funny because you'd expect that would break down. But immediately you saw a reversal. So Bitcoin did the complete opposite of what everybody expected it to do. But nonetheless, we had kind of a sweep down to range lows around 31K.

• 5:02Speaker 02

  And then we've had kind of this sharp rebound into today where we're sitting around 37K. So price action wise, we did get a strong bounce off of the off of those range lows. So that's a good thing. And then another like non-on-chain thing. I think it's interesting to watch how Bitcoin's been reacting a little bit differently to news. I think for a while you had, you know, bad news and price would tank, good news, it wouldn't really do anything. Now you have, you know, good news is seemingly pushing price up and bad news isn't doing as much damage. So I think just kind of from like a fundamental analysis standpoint, like that, that's something that I've noticed that has changed over the last week.

• 5:45Speaker 02

  But, you know, overall, I think what, what, you know, I was really trying to get at in the newsletter this week is that we're kind of in this reaccumulation process. We had talked about, you know, we're kind of consolidating and it's going to take a while. After we had that original dump, it was going to take a while for, you know, those that loose supply to kind of find a new home. But I think this week you're starting to see some of that supply move into accumulation. And, and so we can, we can kind of get into the different metrics, but that's kind of like the high level of it.

• 6:18Anthony Pompliano?

  Got it. Let's start with Soper. Maybe remind us what Soper is and then what you saw this week there.

• 6:25Speaker 02

  Yeah, SOPER is something that we've touched on almost every week. I feel like it's pretty much the net profit of the coins that are trading on any given day. When you have a the ratio is over 1, that means that the coins are trading at profit. Under 1 means that they're they're trading at a loss. And so for anybody looking at the newsletter, and then I think we'll have the charts in this video, you can see we had this big drawdown in SOPER, and it was the largest drawdown since March of last year, which off the bat is good because you have this big reset of profit taking. But then we have another drawdown with, I think it was like 2 days ago. And so that's showing that what it looks

• 7:07Speaker 02

  like to be a double bottom and kind of a higher low, which is something good to look for. And then also you have a higher low in the oscillator while you have a lower low in price. So like a lot of technical analysts will will recognize this is this is a bullish divergence. So you have, you know, higher higher low in the in the oscillator and then a lower low in price. And a bearish divergence would be, you know, higher high in price, lower low in the oscillator. But so we have that, we're back over the 1 threshold and then and then also just making making that higher low double bottom. SOPER looks pretty good. I would like to see it stabilize above 1 though. And then possibly if we had a big

• 7:49Speaker 02

  drawdown to see 1 kind of serve as as support. Throughout the bull market, 1 usually serves other than major corrections, usually serves as that that that bounce threshold because, you know, in a raging bull market, people aren't going to really want to sell at a loss. So you really need a big swing in momentum, like what we've seen over the last few weeks to get people to to start to sell at a loss. But throughout the bull market and most of the corrections we had had, SOPER had bounced off 1. So to see us kind of consolidate above 1, and then if we had a big downswing for for that that threshold to that 1 threshold to serve as as support, that would be that'd be really bullish in my eyes. But so far, SOPER looks pretty good.

• 8:34Anthony Pompliano?

  Got it. And then there's this really interesting relationship between short-term holders and long-term holders that you've identified. Maybe explain that a little bit.

• 8:43Speaker 02

  Yeah, so this has been another trend that we've been keeping an eye on. But for a while, we had been saying that the short-term holders were outselling the long-term holders. So if you look at like a month's change, short-term holders have moved 422,000 roughly BTC out of their holdings, while long-term holders have added 389,000. So you get this net difference of shorter-term holders selling 32,000, like if you do the net between the two, right? But over the last seven days, that's that's kind of reversed. So over the last seven days, long-term holders have accumulated a little over 31,000 more BTC than short-term holders.

• 9:25Speaker 02

  So I think that's a good sign. You're seeing, you know, the short-term holders, the ones that were going to sell at a loss have now sold at a loss. And you're also seeing this offset of longer-term holders now buying at a higher rate of the shorter-term holders that either are getting, you know, exhausted, or they're running out of supply to sell. But, you know, that's showing to me consolidation, because you have, you know, this, these contrary forces where the short-term holders are, had been selling really hard, but now the longer-term holders have kind of edged them out. And you're now seeing that that net positive between the two in favor of the long-term holders. So that's something that that shows me that perhaps

• 10:10Speaker 02

  that this reaccumulation process is towards the like the later stages. A few weeks ago, I would have, I would have said, maybe it's going to be a month or two. But the long-term holders are really aggressively adding to their positions here. And, you know, especially over the last week, week and a half, two weeks, they've really been outpacing that at the short term. So perhaps that means that we won't have as long of an accumulation as I had originally kind of thought.

• 10:39Anthony Pompliano?

  Yeah, I think my main takeaway from a lot of your analysis is definitely that the reaccumulation phase is getting close to to being over before we move up again. One of the other things you identified was this illiquid supply change. Maybe describe that a little bit and kind of what you're seeing.

• 10:54Speaker 02

  Yeah, so Glassstone has this metric and it basically looks at different addresses and then clusters them into entities. And then looks at the selling behavior of that entity. So first of all, they have to hit a certain a certain age threshold, which is 155 days, which is, by the way, for anyone who's wondering, the same threshold for the long and short term holders. So over, over 155 days and then they have to have a very low, I forget what the, what the percentage is, but statistically like very low selling behavior. And then they're determined illiquid. Liquid is like, you know, coins that are being moved in and out all day long.

• 11:34Speaker 02

  So throughout the bull market, one of the, you know, kind of one of the big narratives, I guess you could say was A, the coins moving off, off exchanges and then B, from like an on-chain, between like the on-chain community, I guess. There's a liquid supply thing where Rick, Willie Wu was calling it the Rick Astley chart because these holders look like they were never going to let us down, but they did let us down in late, late May to, to early June, but that, that now seems to be reversing back in, into what looks like accumulation. So that's something to keep an eye on, seeing, and, and once again, that's in the newsletter. But seeing that flip back green, in my opinion, would, would be really bullish because

• 12:19Speaker 02

  you're, you're starting to see the, the supply becoming liquid, that, that weaning off and, and more coins are moving into strong hands. But for now, I mean, we're not out of the woods. It's not like screaming bullish or anything, but it's something to, if it continues this trend, it's, it's a good sign.

• 12:36Anthony Pompliano?

  Absolutely. What about futures, open interest or, or short positions on the various exchanges?

• 12:43Speaker 02

  Yeah. So futures open interest had pretty much been flat since we had had that big drop on that, you know, Wednesday down to 30K. But over, you know, it, it was funny when we, when we broke and maybe this was just timing, but when we broke that triangle, which was, I think the pattern a lot of people were looking at, to be honest. We had kind of this Spike in in open interest and then when it when it snapped back up, I think what had happened was um, a lot of people had loaded up on the bottom of that range when we broke out to the to the downside. And people loaded on shorts um, just people were like, oh, this thing broke out. Everybody's everybody's looking at the same pattern. So we're gonna go way lower.

• 13:24Speaker 02

  And so what happened was we had this this drop and then just kind of uh rapid, you know, nasty wick back up and then we headed we headed back in the other direction and as it was almost like Bitcoin has this tendency to go in the direction that's gonna liquidate the most people. And that's definitely what happened here uh, because everybody, it seems like, took that one side of the trade. You saw funding like drop off a cliff um, a- and then all of a sudden you had this big reversal. But uh, right now, when you know, one interesting thing uh, just on kind of that same note is yeah, the there's been a big spike in shorts throughout the week um, coming from Bitfinex, which

• 14:04Speaker 02

  I the only other time that I've seen anything like this like recently was the day before we had that big drop um, on that Wednesday. So i- i- there's a big increase on on the seventh and like midway through the ninth. So either I don't, you know, obviously, there's no way to know um, this could just be someone hedging, but if if this is, you know, perhaps someone in disbelief, we could be setting up for a short squeeze um, but that's just something to keep in mind. Either if there's somebody knows something or or they're getting ready to get wrecked.

• 14:37Anthony Pompliano?

  Yeah, it could could be both. Who knows? Uh, what what are the miners doing?

• 14:43Speaker 02

  Yeah, the miners is an interesting one because, you know, for a while we had been talking about, oh, miners are stacking, miners are stacking. Uh, but what we've actually seen over the last week, um, actually, the day after we dropped the last episode, miners miners started selling. Um, and and especially from China. Uh, so you know, Glassnode, they they can, they can't recognize every miner, but they can kind of like look at, look at the main ones. It looks like um, some of the transfers to exchanges have come from from the Chinese miners specifically. And then obviously just a big spike in what they call other. It's basically like all these entities they know are miners, but they can't label them. So there's a big spike in that. Who knows what percentage of that were Chinese, but just in the in the main ones like Glassnode is is able to track.

• 15:28Speaker 02

  Um, it a lot of that selling does look like it's coming from China, especially from one uh one uh pool called Poolin, which is uh the second largest. I'm I'm not super familiar with mining. Uh, but I looked it up and it said Poolin is the second largest uh pool in China. So and you know, it's not, it's not like they're dumping all their supply and it's something like that would have some crazy effect on price. Um, you know, they're I'm talking like 5,000 BTC, um, nothing, nothing crazy that that's gonna significantly move the price. But um, it is interesting to just watch, you know, we have all that stuff. Um, China's coming out saying they're banning mining and it does look like, um, you know, we've had this drop off in hash rate,

• 16:10Speaker 02

  uh, but also some some selling or perhaps just, um, you know, ma- maybe, maybe these, maybe these miners are just relocating and and they they need to, you know, they need some capital to to move over or maybe they're they just wanna, you know, move around their holdings while they while they change locations. Who knows? But I I do see that that interesting um movement of coins out of uh the miners wallets while we've had all this, you know, this this China flood about China's banning Bitcoin, etc.

• 16:39Anthony Pompliano?

  Yeah, there's some political and and kind of regulatory things that are going on that could be causing uh things that would be abnormal on the on-chain metrics. Mainly be just because they have to move, they have to get access to cash. Uh, so it makes a ton of sense. The last metric that I want to look at or kind of last analysis is Plan B's stock to flow. Uh, I think this infamous analysis at this point, uh, there's a lot of people who think it's accurate. There's a lot of people who don't think it's accurate. Where do we stand? Is it still valid or or has it been invalidated?

• 17:07Speaker 02

  Yeah, shout out to Plan B, really good dude. His model is something that I kind of think is directionally correct. It's something where you can you can look at to kind of gauge the broader cycle. I wouldn't I wouldn't per se trade the stock to flow price and use that as some kind of like short term. It seems like he was he was posting that some traders are actually using the stock to flow multiple to trade off of, but I see it as more kind of a broader cycle. You know, something you look at to gauge that, but that's just my opinion. We are currently having this the second largest, or actually, I'm sorry, to the downside, the largest deflection in the history of the model.

• 17:51Speaker 02

  So it's something to keep an eye on. I think we're I saw he posted something, we're sitting on like the very lower bound. He has the main the main stock to flow, you know, the model price, and then he has these two bands around that, and we're sitting right on that lower band. So it's crunch time for S2F, and we'll see over the next couple of weeks. But this bounce is looking a little promising for Plan B.

• 18:16Anthony Pompliano?

  So basically, if it goes lower, there's a potential that it gets invalidated, but it looks like just based on some of the recent kind of more bullish activity, if the price recovers, then we'll still be intact there, bounce right off the bottom as you would expect it to, and kind of still bull market, ready to roll.

• 18:33Speaker 02

  Yeah, yeah, I think that that's what Plan B is definitely hoping for. I think that's what we're all hoping for too, but we'll see what happens over the next few weeks.

• 18:42Anthony Pompliano?

  Absolutely. And so it seems like this week, the big theme is just that the reaccumulation phase is nearing an end, right? Which means, you know, there was a ton of volatility, there was fear, there was greed, all this stuff that played out, but we've been going sideways for a little bit, and people have been reaccumulating, strong hands have been buying more and more, and at some point here, that's going to end in the short term with likely, but you can't promise, but likely a move upwards. Is that fair to kind of categorize the analysis?

• 19:12Speaker 02

  Yeah, I think so. And only thing I would say is that about the volatility, I think the volatility, like as we, as we trend through the channel has been trending down. But once, once we break out of that, of the, of the whatever consolidation pattern you want to call it, whether it's just like a horizontal range that we're in, once we finally get a strong move, I think that volatility comes back because the futures comes back. And this is something I should have for us next week, but I'm trying to put a ratio of the futures open interest to the market cap to kind of gauge when the futures open interest has a stronger effect on, on, you know, on price. And then therefore it would be more important to look at things like funding rates, et cetera. But yeah, I think, I think if you, if you have

• 19:56Speaker 02

  a strong move, and that's what we kind of saw today in that tick up in, not today, yesterday, and that tick up in futures open interest, I think it's showing like when we have a strong move, you're going to see traders come back in. But while we're in the range, people are, people are still waiting. But, but other than that, yeah, I completely agree.

• 20:16Anthony Pompliano?

  Awesome, man. Well, listen, thank you so much for, for taking the time to do this. If anyone has not yet subscribed to Will's email, where can they go do that, Will?

• 20:27Speaker 02

  Yeah, sure. So we're doing these episodes every week. And then I have a newsletter, it's BTC by WC3.substack.com. And it's, it's free. All you have to do is just type in your email and hit subscribe.

• 20:40Anthony Pompliano?

  You're, you're growing a big audience over there pretty quickly. I think you're, you may be on to something here. So keep up the great work. And everyone here on YouTube, you'll see us again on next Saturday.

• 20:53Speaker 02

  Appreciate it, Pop. Take it easy. All right, everybody.