As data from blockchain analysis firm Glassnode highlights, Bitcoin (BTC)’s recent patterns are undergoing a significant transformation. The Accumulation Trend Score, a key metric that measures the relative strength of Bitcoin accumulation by different groups of asset wallets, fell to 0.5, marking its lowest level since October 2023.
Accumulation process for Bitcoin is over
The Hoarding Propensity Score is derived from the net change in supply held by each group over time. A positive score indicates accumulation, a negative score indicates dispersion. A score of zero means a balance between accumulation and distribution. Glassnode’s analysis reveals a significant shift from accumulation to distribution across nearly all groups. This change is reminiscent of the distribution pattern observed in September 2023, before Bitcoin’s notable rise from $25,000 to $49,000 in October 2023, triggered by the launch of the spot Bitcoin ETF.
In the midst of this transition, holders of 100 to 1000 BTC are attracting attention. Because it emerges as the only group that is still in the accumulation phase with a positive score of 0.8. This particular group represents a significant portion of Bitcoin supply. It also holds about 42% of the total. In contrast, ‘whales’, characterized by investors holding 10,000 BTC or more, have had a distribution with a negative score of -0.4 since December 15, 2023. Additionally, individual holders holding less than 1 BTC received a negative score of -0.22.
What will be the impact on market dynamics?
The overall distribution trend observed has broader implications for Bitcoin’s market dynamics. Because it carries a potential risk of affecting price stability and liquidity. As more Bitcoin owners choose to sell their coins, the supply on exchanges increases. This creates additional selling pressure and downward price movements. Conversely, distribution creates opportunities for new buyers to enter the market. That is, it encourages increased demand and upward price movements.
According to CoinMarketCap, Bitcoin is currently up 0.4% in the last 24 hours. So it is traded at $42,977. The evolving dynamics in accumulation and distribution patterns underscore the need for market participants to closely monitor these trends, as they could play an important role in shaping Bitcoin’s future price movements. In conclusion, the recent change in Bitcoin’s Accumulation Propensity Score highlights a nuanced phase in the market, with implications for various groups. As the cryptocurrency landscape continues to evolve, it is critical to keep a close eye on these distribution models. Because it is vital for making informed decisions in the volatile world of cryptocurrencies.
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