On-chain analytics firm Glassnode has highlighted how the accumulation of the major Bitcoin entities has remained relatively weak of late. Bitcoin accumulation trend score is struggling to break the 0.5 mark. In a new post on This on-chain indicator tracks whether BTC investors are currently accumulating or distributing. The metric calculates its value by looking at the balance changes that occur in investors’ portfolios. Moreover, it also takes into account the size of the wallets themselves. This second weighting factor means that larger entities have a stronger influence on the indicator. Related reading: Bitcoin is approaching the death cross that preceded the last bear market legs When the value of the accumulation trend score is greater than 0.5, it means that large investors (or a large number of small entities) are accumulating. The closer the statistic is to 1, the stronger this behavior is. On the other hand, an indicator below 0.5 implies that distribution is the dominant behavior on the network. The extreme point on this side of the scale is at 0. Here is the chart shared by Glassnode showing how the Bitcoin Accumulation Trend Score has changed over the cycle: As shown in the chart above, the Bitcoin price crash in November has caused the Accumulation Trend Score to turn a dark purple color. Here, a light yellow shade on the indicator reflects a value close to zero, while a dark purple shade reflects a value close to 1. So it appears that the market responded with near-perfect accumulation behavior to the November price lows. While accumulation continued in December, a shift occurred in January; The price recovery rally was welcomed as the accumulation trend score turned orange-yellow. The cryptocurrency’s price has plummeted since this selling pressure began. The price crash has involved some accumulation, but the chart shows that the color of the indicator has still only been red. “The Accumulation Trend Score has struggled to rise above 0.5 since early February,” the analytics firm said. While the current value suggests that aggressive distribution is no longer happening, it is also not necessarily a sign of a return in Bitcoin demand. As Glassnode explained, the trend reflects “continued weak accumulation, especially among larger entities, indicating that meaningful capital has yet to intervene.” It now remains to be seen how long the current neutral market behavior will continue and which direction the next shift will take. Related reading: Bitcoin capitulation continues as short-term holders realize daily losses of $0.48 billion BTC price Bitcoin fell below the $63,000 level on Tuesday, but the market has since recovered as the cryptocurrency’s price has returned to $65,300. Featured image of Dall-E, chart from TradingView.com
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