A crypto analyst that is building his audience recently with his timely on-chain signals revealed that several investors are buying the huge price correction.
In his recent episode of The Pomp Letter, Will Clemente mentioned that a substantial portion of the Bitcoin bought during the Wednesday downturn that saw the price of the digital asset fall from $43,500 to about $30,000 are from the people holding it in the short-term.
The Analyst also added that the entities who sell the most in that period are large Bitcoin whales who dumped BTC in its tens of thousands.
Clemente said concerning those that bought the tremendous BTC supply that they are the new wave of whales that contain the selling pressure in the system.
He said, “The cohort that made the acquisition through the dip are the whales that are holding about 10,000 BTC to 100,000 BTC. This wave of whales added over 122,588 BTC to their BTC holdings altogether on Wednesday. Interestingly, most of the acquisition is coming from the western region of the United States. The reason why this is noteworthy is that at a particular point in the rise, Coinbase is trading at $3,000 more than the remaining exchanges. The implication of this is that the buyers from the western region are spamming the ‘Buy’ button.”
Since the day of the price drop, the flows in the exchange have been normalized and are no longer bearish. The Over-the-counter desk (OTC) outflowed rose very high during the price drop, revealing a very strong acquisition from institutions with high net worth.
In ‘The Pomp Letter’, Clemente is also considering the Volume distribution of BTC just before the price correction. According to him, there was a heavy volume distribution above the $40,000 price mark implies that Bitcoin is in the middle of the accumulation cycle in the bull market.
In the last 2 – 3 months, there was a huge volume when the price was in the $40,000 – $60,000 range, most especially around the $53,000-$58,000. More than 25% of the total supply has shot above $40,000 altogether.
Comparing the past bull cycles that happened in 2017 and 2013, the current volume distribution looks stronger than the previous cycle.
Clemente, however, concluded that though the current price fall is unexpected, it is very important for the bull market to be sustained.