A report from on-chain analytics firm Glassnode has revealed that bitcoin accumulation behavior is starting to return among investors.
bitcoin's accumulation trend score has recently risen to the 1 mark
In its latest weekly report, Glass node There has been some discussion about how bitcoin investors have been performing recently. The on-chain metric of interest here is the “accumulation trend score,” which basically tells us whether or not bitcoin investors have been accumulating over the past month.
The indicator calculates its score not only by tracking balance changes occurring in holders' wallets, but also by taking into account the size of their wallets, thus giving greater weighting to larger investors.
When the value of this metric is close to 1, it means that large entities on the network (or alternatively, a large number of small holders) have been participating in accumulation.
On the other hand, the fact that it is close to the 0 mark suggests that large participants have been distributing or simply have not participated in any accumulation over the past 30 days.
There are two versions of this indicator, below is the chart for the first one, which shows the accumulation trend score separately for different wallet groups in the sector.
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/08/Bitcoin-accumulation-is-returning-Glassnode-report-reveals.png" alt="bitcoin Trend Accumulation Score” width=”2000″ height=”892″ data-recalc-dims=”1″/>
Looks like the various cohorts have started to turn blue in recent days | Source: Glassnode's The Week Onchain - Week 33, 2024
As can be seen in the chart above, bitcoin’s Accumulation Tendency Score had been deep red for the entire market during the consolidation that followed the price’s all-time high (ATH), implying that distribution had been taking place.
However, recently the indicator has started to slowly turn blue for cohorts. Interestingly, larger groups show more aggressive accumulation, with the metric very close to level 1.
The group showing the highest degree of buying is the one above 10,000 btc, which can be associated with entities such as spot exchange-traded funds (ETFs). “These large portfolios appear to be returning to an accumulation regime,” Glassnode says.
Since the accumulation tendency score gives greater weight to larger cohorts, it is not surprising to see the other version, the combined market version, rise to 1, given the strong accumulation by the largest whales in the sector.
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/08/1723723529_270_Bitcoin-accumulation-is-returning-Glassnode-report-reveals.png" alt="bitcoin whale accumulation” width=”2000″ height=”1152″ data-recalc-dims=”1″/>
The value of the metric appears to have been quite close to 1 recently | Source: Glassnode's The Week Onchain - Week 33, 2024
It is clear from the chart that the last time the Accumulation Trend Index indicated similar levels of accumulation in the market was during the rally towards the all-time high. Therefore, it is possible that bitcoin will end up seeing 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% from last week.
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The price of the coin seems to have registered a surge during the last 24 hours | Source: BTCUSD on TradingView
Featured image by Dall-E, Glassnode.com, chart by TradingView.com
