A report from the on-chain analytics firm Glassnode has revealed that Bitcoin accumulation behavior is starting to return among the investors.
Bitcoin Accumulation Trend Score Has Surged To The 1 Mark Recently
In its latest weekly report, Glassnode has discussed about how the behavior among the Bitcoin investors has looked like recently. The on-chain metric of interest here is the “Accumulation Trend Score,” which basically tells us about whether the Bitcoin investors have been accumulating or not over the past month.
The indicator calculates its score by not only keeping track of the balance changes happening in the wallets of the holders, but also by taking into account for the size of their wallets, thus providing a higher weightage to the larger investors.
When the value of this metric is close to 1, it means the large entities on the network (or alternatively, a large amount of small holders) have been participating in accumulation.
On the other hand, it being near the 0 mark suggests the big participants have either been distributing or simply not taking part in any accumulation during the last 30 days.
There are two versions of this indicator; below is the chart for the first of these, which shows the Accumulation Trend Score separately for the different wallet groups in the sector.
Looks like the various cohorts have started to turn blue in recent days | Source: Glassnode's The Week Onchain - Week 33, 2024
As is visible in the above graph, the Bitcoin Accumulation Trend Score had been deep red for the entire market during the consolidation that had followed the price all-time high (ATH), implying that distribution had been occurring.
Recently, however, the indicator has slowly started to turn blue for the cohorts. Interestingly, the larger groups are showing the more aggressive accumulation, with the metric being very close to the 1 level.
The group showing the highest degree of buying is the 10,000+ BTC cohort, which can be associated with entities like the spot exchange-traded funds (ETFs). “These large wallets appear to be returning to a regime of accumulation,” says Glassnode.
As the Accumulation Trend Score puts higher weightage on the larger cohorts, it’s not surprising to see that the other version, the one for the combined market, has risen to 1, given the strong accumulation from the largest of whales in the sector.
The value of the metric appears to have been quite close to 1 recently | Source: Glassnode's The Week Onchain - Week 33, 2024
From the chart, it’s apparent that the last time the Accumulation Trend Score signaled similar levels of accumulation in the market was back during the rally to the ATH. Thus, it’s possible that Bitcoin could end up observing a bullish effect from the buying this time as well.
BTC Price
At the time of writing, Bitcoin is trading around $61,300, up more than 7% over the past week.
The price of the coin seems to have registered a surge during the last 24 hours | Source: BTCUSD on TradingView