Anika Begay
A report from on-chain analytics firm Glassnode has revealed that Bitcoin hoarding behavior is starting to resurface among investors.
Bitcoin’s accumulation trend score recently rose to level 1
In their latest weekly report, Glassnode discussed how Bitcoin investor behavior has manifested itself recently. The on-chain metric of interest here is the “accumulation trend score,” which essentially tells us whether or not Bitcoin investors have accumulated over the past month.
The indicator calculates its score not only by tracking the balance changes that occur in the holders’ portfolios, but also by taking into account the size of their portfolios, thus giving greater weight to larger investors.
When the value of this metric is close to 1, it means that large entities on the network (or alternatively, a large number of small holders) have participated in the accumulation.
On the other hand, a value close to 0 suggests that large participants have distributed or simply have not taken part in any accumulation in the last 30 days.
There are two versions of this indicator; below is a chart of the first of them, which shows the Accumulation Trend Score separately for different groups of portfolios in the sector.
Looks like the various cohorts have started to turn blue in recent days | Source: Glassnode's The Week Onchain - Week 33, 2024
As can be seen in the chart above, the Bitcoin Accumulation Trend Score had been in deep red for the entire market during the consolidation that followed the all-time price high (ATH), implying that a distribution was taking place.
Recently, however, the indicator has slowly started to turn blue for cohorts. Interestingly, the larger groups are showing more aggressive accumulation, with the metric very close to level 1.
The group showing the highest level of buying is the 10,000+ BTC cohort, which can be associated with entities such as spot ETFs. “These large portfolios appear to be returning to an accumulation regime,” Glassnode says.
Since the Accumulation Trend Score places greater weight on larger cohorts, it is not surprising to see the other version, the one for the combined market, rise to 1, given the strong accumulation by the largest whales in the sector.
The value of the metric appears to have been quite close to 1 recently | Source: Glassnode's The Week Onchain - Week 33, 2024
From the chart, it is evident that the last time the Accumulation Trend Score signaled similar levels of accumulation in the market was during the rally towards ATH. Therefore, it is possible that Bitcoin could end up seeing a bullish buying effect this time as well.
BTC Price
At the time of writing, Bitcoin is trading around $61,300, up more than 7% from last week.
The price of the coin seems to have registered a surge during the last 24 hours | Source: BTCUSD on TradingView
Featured image from Dall-E, Glassnode.com, chart from TradingView.com
