Data shows the Bitcoin Accumulation Trend Score has seen a rise to the highest point of the year. Here’s what this could mean for the asset’s price.
In a new post on X, the on-chain analytics firm Glassnode has talked about the latest trend in the Accumulation Trend Score of Bitcoin. The “Accumulation Trend Score” here refers to an indicator that tells us about whether the BTC investors are accumulating or not.
The metric makes use of the balance changes happening in the wallets of the holders in order to calculate its value. Additionally, it also applies the size of the balance of the investors as a weighting factor on these changes. This means that larger entities have a larger influence on the indicator.
When the Accumulation Trend Score is greater than 0.5, it means the the large investors (or alternatively, a large number of small addresses) are accumulating. The closer is the metric’s value to 1, the stronger is this relationship.
On the other hand, the indicator being under 0.5 suggests the holders are in a phase of distribution (or possibly, they are just not participating in accumulation). In this case, the extreme point lies at 0.
Now, here is the chart shared by the analytics firm that shows the trend in the Bitcoin Accumulation Trend Score over the last few months:
In the graph, the curve represents the price of the cryptocurrency and the shaded dots the Accumulation Trend Score associated with the corresponding date. A light yellow color means a value close to 0, while a dark purple one close to 1.
From the chart, it’s visible that the Bitcoin Accumulation Trend Score had a light shade back in January, meaning the investors were participating in strong distribution.
As the price has topped out and declined since then, the indicator’s value has registered an increase, a sign that selling behavior has been waning among the investors.
Today, the metric has reached a shade corresponding to a value of 0.34, which is the highest that it has been since the start of the year. “This suggests that, on aggregate, wallets are beginning to re-enter accumulation mode, with larger cohorts stepping in modestly despite recent price weakness,” notes the analytics firm.
Obviously, the market behavior hasn’t shifted to that of outright accumulation just yet, but the trend is naturally still positive given the bearish action that Bitcoin has gone through recently.
Bitcoin has witnessed a minor pullback during the past day as its price has dropped to $84,700.