Data from on-chain analytics firm Glassnode reveals that bitcoin investors have recently been aggressively accumulating the cryptocurrency, a trend that may help prolong the ongoing rally.
The “accumulation trend score” is the key indicator being analyzedas it reflects whether bitcoin investors have been accumulating or distributing the digital asset over the past month.
The accumulation trend score not only means the volume of coins that holders buy or sell, but also the wallet sizes of the participants involved in the accumulation or distribution process.
A score close to 1 indicates that large entities or a significant number of smaller investors are currently accumulating the asset. Conversely, scores close to 0 suggest that holders are spreading or not stockpiling much at the moment.
A chart showing the trend in bitcoin’s accumulation trend score over the past few years shows that during the initial months of the latest rally, the metric was closer to 0, implying substantial distribution among large entities. . This could indicate that investors were not confident that the rally would last and were eager to lock in their profits.
However, the recent trend has changed as the price approaches $30,000. Interestingly, the current rally appears to be following a similar pattern to the April 2019 rally, which began in the wake of bear market lows and faced substantial distribution in its early stages.
As that rally approached its “cycle baseline”, investor behavior shifted towards large accumulation and the indicator turned dark purple (values very close to 1). The April 2019 rally saw strong bullish momentum after this accumulation began.
With the bitcoin price now approaching the $30,000 mark, the accumulation trend score has also shifted towards accumulation. This level represents the baseline of the current cycle, which bears a structural similarity to the 2018-2019 cycle.
If the ongoing rally continues to follow the pattern of the April 2019 rally, the recent shift towards accumulation could be a positive development for rising prices. At the time of writing, bitcoin is trading around $28,200, which is a 4% increase from last week.
