On-chain analytics firm Glassnode has highlighted how accumulation during the recent Bitcoin drop has looked weaker than some past crashes.
Bitcoin Accumulation Trend Score Doesn’t Indicate Strong Accumulation
In a new post on X, Glassnode has talked about the latest trend in the Accumulation Trend Score of Bitcoin. This indicator tracks whether the BTC investors are accumulating or distributing right now.
The metric determines this by taking into account for two factors: the balance changes happening in the wallets of the holders and the size of the balances themselves. The latter factor means that larger entities have a higher weightage in the indicator.
When the value of the Accumulation Trend Score is greater than 0.5, it means the large holders (or a large number of small entities) are in a phase of accumulation. The closer is the metric to the 1.0 level, the stronger is this behavior.
On the other hand, the indicator being under the 0.5 mark suggests distribution is dominant on the network. The selling can be considered the strongest at a value of zero.
Now, here is the chart shared by Glassnode that shows the trend in the 7-day moving average (MA) of the Bitcoin Accumulation Trend Score over the last few years:
As displayed in the above graph, the Bitcoin Accumulation Trend Score took a yellow shade as the cryptocurrency’s January recovery rally topped out and a move downward followed. This suggests that the investors were distributing.
As the coin has stabilized above $65,000 recently, the indicator’s color has changed to a darker one, implying it has broken back above the 0.5 mark. While this is a sign that there has been some accumulation at the post-crash price levels, the degree of it hasn’t been too high.
From the chart, it’s apparent that this behavior is in contrast to how the market reacted to the November crash. Back then, the Accumulation Trend Score took a deep purple shade, indicating an aggressive amount of accumulation from the big-money hands.
The LUNA and FTX crashes from the 2022 bear market were also met with a similarly extreme accumulation behavior. It now remains to be seen whether the lack of demand this time around will mean that Bitcoin will take some time to settle into a low.
In some other news, Glassnode has shared an update in an X post on how the major Bitcoin on-chain price models are looking.
As is visible in the graph, Bitcoin’s decline has meant that its price is now trading under all major on-chain pricing models except for the Realized Price, corresponding to the cost basis of the network participants as a whole. This level is currently located at $54,900.
BTC Price
Bitcoin has stagnated since its recovery from the $60,000 low as its price is still floating around the $68,000 level.
