Widely followed on-chain analyst Will Clemente says Bitcoin (BTC) buy orders on crypto exchange Coinbase are reminiscent of BTC’s bottom in March 2020.
Clemente tells his 657,400 Twitter followers that BTC bulls on Coinbase have placed thick buy orders from $17,000 and below.
According to the on-chain analyst, the eagerness of market participants to catch BTC at lower prices bodes well for the king crypto.
“Bids in the Bitcoin orderbook on Coinbase are stacked down from $17,000 and below. A lot of people are hoping to buy BTC lower. The last time the orderbook was this skewed to the bid-side was the grind up from the March 2020 lows.”
In March 2020, Bitcoin crashed to around $3,700 before launching a massive rally that propelled BTC to $64,000 about a year later.
Clemente also has his eye on another metric that has previously marked the tops and bottoms of Bitcoin. According to the on-chain analyst, the ratio between the total market cap of the two largest stablecoins and the total crypto market cap is also flashing bottom signals.
“USDC+USDT market cap/total crypto market cap ratio continues to roll off of the historical bottoming area, respecting the channel bounds… General idea is that when the ratio is high and at channel bounds, large percentage of stables [are available] to be deployed relative to crypto market cap. When [ratio is] low, there’s a lot of stables that have already been deployed.”
Although on-chain signals appear to be favoring BTC bulls, Clemente warns that macroeconomic data scheduled to be released today could derail Bitcoin’s bounce.
“CPI (consumer price index) announcement on Wednesday dictates if this risk-on bear market rally continues in the short term.”
The CPI is a widely tracked measure of the US inflation rate. Says Clemente,
“Inflation rolling over = Fed can take foot off gas. Inflation persisting higher = Fed has to keep foot on the gas.”
The US Federal Reserve has been raising interest rates in an effort to combat inflation, a macroeconomic policy that has kept the crypto markets bearish over the past months.
At time of writing, Bitcoin is swapping hands for $22,838, down 3% on the day.
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