Bitcoin
Will Clemente claims that Bitcoin’s consolidation period remains uncertain; Draws parallels to 2020 price action
Will Clemente, co-founder of Reflexivity Research, explained that Bitcoin is widely recognized as a hard money asset, making it necessary to invest in Bitcoin clearer than ever. He mentioned how Larry Fink publicly supported Bitcoin, solidifying his thesis. However, when considering investments further along the risk spectrum, questions arise about the value of various altcoins, especially those with market capitalizations in the $1 to $2 billion range.
In conversation with Anthony Pompliano, Will said that Bitcoin is currently consolidating just below its all-time highs. He noted that the duration of this consolidation is uncertain, with some referring to it as a “sideways summer.” The price action resembles late 2020, when Bitcoin consolidated below $20,000 for a while before breaking out.
He explained that many sellers at previous highs look to offload their holdings at break-even points and it is unusual for markets to surpass all-time highs without facing some rejections. Furthermore, he highlighted that derivatives traders often get leverage purchased at key levels, only to be eliminated before the market stabilizes and moves forward.
Will added that while ETFs provide an interesting narrative for the market, they are not the ultimate determinant of market direction. He explained that daily ETF inflows and outflows are not reliable indicators for predicting day-to-day market movements. The overall trend of ETF flows is important, but one day’s data does not offer a forward-looking view.
He highlighted that ETF flows are often a reflection of market activity; for example, net outflows occur when the market goes down because people are selling, and inflows happen when the market goes up because of buying. He said looking at broader trends, such as a 7-day moving average of ETF flows, is more helpful in understanding market direction and potential second waves of movement.
Read too: Could Ethereum Start an Altcoin Season Moving Toward the $4,000 Mark?