On-chain data shows that the largest of the bitcoin whales has returned to distribution, a sign that could be bearish for the asset’s price.
bitcoin Investors With More Than 10,000 btc Are Selling Again
As analyst James V. Straten explains in a new mail On X, btc whales, which had previously been in an accumulation phase, have now changed their behavior to distribution.
The relevant indicator here is Glassnode’s “Trend Accumulation Score”, which tracks whether bitcoin investors have been buying or selling over the last month. This metric finds this value by looking at balance changes in holder addresses.
The score also gives a greater weight to larger entities, meaning that the accumulation of a few large holders would be more meaningful to the indicator than the behavior of smaller hands.
When the Trend Accumification Score has a value close to 1, it means that there is a net accumulation trend in the market at the moment. On the other hand, values close to zero imply that the distribution is the currently dominant behavior.
Now, here’s how this score has changed for different groups of bitcoin investors since the beginning of the year:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/Bitcoin-Mega-Whales-Return-to-Sell-Mode-More-Downsides-Soon.jpeg" alt="bitcoin Trend Accumulation Score” width=”1148″ height=”486″ loading=”lazy”/>
The data for the Trend Accumulation Score for various groups | Source: @jimmyvs24 on X
As you can see above, the entire bitcoin market had been showing net distribution behavior throughout August, as the accumulation trend score had been a shade of red for all cohorts (with deeper shades naturally being closer to the zero mark). During this sell-off period, btc had recorded a significant drop.
At the beginning of September, most investor groups were still selling, but interestingly, the largest cohort in the sector, holders of more than 10,000 btc ($262.7 million at current exchange rates) had begun to accumulate .
This group can be called the “mega whales,” as these investors stand out even among the whales. From the data it is clear that, although these mega whales had been buying at the beginning of the month, they have recently shown a change in their behavior again.
The trend accumulation score has decreased for these huge entities and is now leaning towards distribution. This may suggest that while these investors had thought that the previous lows presented ideal entry opportunities, the fact that the currency has continued to stagnate recently may have changed their minds.
Currently, however, mega whales are not dumping bitcoin on too large a scale. However, the same is not true for the rest of the cohorts, who have recently made some pretty heavy sales, as the Trend Accumulation Score has turned deep red for them.
This market-wide selling could be a worrying sign for the cryptocurrency and may be a harbinger of a decline in the near future.
btc Price
bitcoin has been showing a general consolidation trend since the August crash, as the cryptocurrency continues to float around the $26,200 mark.
<img decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/Bitcoin-Mega-Whales-Return-to-Sell-Mode-More-Downsides-Soon" alt="bitcoin price chart” width=”1534″ height=”876″ loading=”lazy”/>
btc has been stuck in sideways movement for a while now | Source: BTCUSD on TradingView
Featured image by Rod Long on Unsplash.com, TradingView.com charts, Glassnode.com
