On-chain data from Glassnode shows that the largest Bitcoin whales are exhibiting the opposite behavior from what other investors have done.
Bitcoin Market is currently observing a moderate distribution phase
This is evident from data from the on-chain analytics company Glasnode, the behavior of the largest BTC whales has once again deviated from the rest of the market. The relevant indicator here is the “Trend Accumulation Score”, which tells us whether Bitcoin investors are buying or selling.
There are mainly two factors that account for the metric to find this score: the balance sheet changes taking place in holders’ portfolios and the size of the investors making such changes. This means that the larger the investor making a buy or sell move, the greater its weight in the Trend Accumulation Score.
When the value of this metric is close to 1, it means that the larger holders in the industry are currently accumulating (or a large number of small investors are exhibiting this behavior). On the other hand, the indicator has a value near the zero mark, suggesting that the investors are currently on a distribution trend.
This indicator is generally defined for the entire market, but can also be used for specific investor segments. In the chart below, Glassnode has provided the data for the Bitcoin Trend Accumulation Score of the different holder groups in the market.
The value of the metric seems to be red for most of the market right now | Source: Glassnode on Twitter
Here, the investors in the market are divided into six different cohorts based on the amount of BTC they have in their wallets: less than 1 BTC, 1 to 10 BTC, 10 to 100 BTC, 100 to 1,000 BTC, 1,000 to 10,000 BTC, and above 10,000 BTC.
From the chart above, it can be seen that the Trend Accumulation Score for all of these groups was around 1 at the bear market lows after the November 2022 FTX crash, suggesting that the market as a whole was buying heavily at the time .
This accumulation continued until the rally came in January 2023, when market behavior began to shift. The holders started distributing during this period and sold a lot between February and March. After this sharp distribution, the rally lost steam and the price fell below $20,000.
However, these investors began to accumulate again as the price recovered sharply and the rally started again. Although this time the accumulation was only moderate.
Interestingly, while market behavior was more or less the same in the months leading up to this new accumulation sequence (meaning all groups were buying or selling at the same time), this new accumulation sequence was not the largest of the participating whales (over 10,000 BTC). group). Instead, these giant investors went through a distribution phase.
Since Bitcoin broke above the $30,000 level in mid-April 2023, investors have been selling again and exhibiting moderate distribution behavior.
Like the accumulation phase prior to this sale, the 10,000+ BTC whales have not joined the rest of the market; rather, they have aggressively built and expanded their wallets. These holders seem to have decided to move in the opposite direction of the overall market.
BTC price
At the time of writing, Bitcoin is trading around $28,900, up 1% over the past week.
BTC has declined below $29,000 again | Source: BTCUSD on TradingView
Featured image by Rémi Boudousquié on Unsplash.com, charts from TradingView.com, Glassnode.com
