On-chain data shows all the Bitcoin cohorts are showing accumulation behavior right now, the first time it has happened this year so far.
Bitcoin Accumulation Trend Score Is Near Perfect For All Groups
In its latest weekly report, the on-chain analytics firm Glassnode has talked about the accumulation and distribution trends among the different BTC cohorts. The relevant indicator here is the “Accumulation Trend Score,” which keeps track of the behavior that the Bitcoin investors are showing right now.
The metric does so by tracking the 30-day changes in the balances of the holders. The indicator also takes into account the size of the entities when looking for accumulation and distribution behaviors.
When the indicator’s value is close to 1, it means that the BTC group of focus has been accumulating recently. On the other hand, values close to 0 imply distribution has been the dominant trend among these holders.
Now, here is a chart that shows how the Accumulation Trend Score has changed for the different cohorts over the past year:
Looks like the value of the metric has been dark blue throughout the market recently | Source: Glassnode's The Week Onchain - Week 45, 2023
From the above graph, it’s visible that the Bitcoin market has gone through several phases this year where all the cohorts participated in some heavy distribution.
As would be expected, the price of the cryptocurrency had felt resistance every time the investors had gone through their period of distribution activity. The uptrends, on the other hand, had naturally occurred as balanced inflows had occurred across the different cohorts.
During these phases of accumulation, though, there wasn’t a point where all the cohorts showed the behavior simultaneously. That was only the case, however, until late October, when the market took an unusual turn.
As is apparent from the chart, all the Bitcoin groups started buying then and have continued to do so in the days since. It’s also not been just some light accumulation, either, as the Accumulation Trend Score has remained deep blue for the groups, suggesting that heavy buying has been taking place.
It’s no wonder that Bitcoin has registered some sharp bullish momentum coinciding with this period of strong accumulation. The fact that the investors have also not stopped the buying activity just yet could also be an optimistic sign, as it means that there could still be more in the tank left for the rally.
Glassnode has also pointed out how the accumulation has been particularly significant on the smaller side of the market, as the balance change for the shrimps (less than 1 BTC), crabs (1 to 10 BTC), and fish (10 to 100 BTC) is considerably positive right now.
The value of the metric seems to have been positive since a while now | Source: Glassnode's The Week Onchain - Week 45, 2023
“The combined rate of balance increase for this sub-group is currently equivalent to 92% of newly mined supply, and has remained in an elevated state since May 2022,” explains the report.
BTC Price
After observing a setback yesterday, Bitcoin has already bounced back above the $35,000 level.
BTC has observed a jump in the past day | Source: BTCUSD on TradingView