The “accumulation trend score,” a new Bitcoin indicator from Glassnode, indicates that the market has recently shifted toward distribution.
Recently, The Bitcoin Accumulation Trend Score Has Ranged Between 0.2 and 0.5
According to Glassnode’s most recent weekly report, the latest addition to the on-chain market intelligence company’s indications indicates that the trend in recent weeks has been toward distribution.
The “accumulation trend score” monitors the aggregate Bitcoin accumulation or distribution by investor wallets in the aggregate.
According to Glassnode, “this tool monitors when huge entities (referred to as whales) and/or large segments of the market (referred to as shrimps in vast numbers) increase their currency holdings, while also filtering out miners and exchanges.”
When this indicator’s value approaches zero, it indicates that the market is now distributing or that there is little accumulation taking place. Such a tendency could be unfavorable for the cryptocurrency’s price.
On the other side, a value near to one indicates that investors are accumulating at the time, since their balances are increasing significantly.
Now, here is a graphic illustrating the accumulation trend score for Bitcoin over the last few of years:
As shown in the accompanying graph, the value of the Bitcoin accumulation trend score remained over 0.9 between October 2021 and January 2022, meaning that significant accumulation occurred during that time period.
However, for the most of 2022, the metric has fluctuated between 0.2 and 0.5, indicating that the market’s recent tendency has been toward net distribution.
The lacklustre accumulation during this era appears to be a result of the multiple macroeconomic concerns that will loom over markets in 2022.
One of the primary drivers of such insecurity is Russia’s invasion of Ukraine, which persists even while the battle continues.
Bitcoin’s price is hovering around $38.7k at the time of writing, down 0.5 percent in the last seven days. The cryptocurrency has lost 9% of its value in the last month.
The chart below illustrates the price trend of BTC over the previous five days.
Bitcoin’s price has been stagnant for some time now, as the cryptocurrency’s value continues to consolidate between the $40k and $35k levels.
At the moment, it is unknown when the coin will be able to escape this range-bound environment. However, if the accumulation pattern is any indication, the crypto is headed for a bear market.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.