Glassnode discusses 4 phases of Bitcoin accumulation and distribution over the past year
Glassnode has talked about the four phases of Bitcoin accumulation and distribution over the past year in its latest report.
Bitcoin Accumulation Trend Points show that the market has sold off recently
According to this week’s edition of the Glassnode weekly report, the market has observed four distinct phases over the past twelve months.
The relevant indicator here is the “accumulation trend score”, which tells us whether the market participants are accumulating or not right now.
Not only does the calculation check how much investors buy/sell, but it also takes into account the size of the holdings of these participants. As such, the score gives a higher weighting to larger aggregator/distributor holders.
When the value of this metric is closer to 1, it means that large participants or a large part of the network have gathered during the last month.
On the other hand, the indicator’s value being close to zero means that large owners have either not accumulated recently, or directly distributed their coins.
Now, here is a chart showing the trend of the Bitcoin Accumulation Trend Score over the past year:
The value of the metric seems to have been closer to zero in recent days | Source: Glassnode's The Week Onchain - Week 36, 2022
As you can see in the graph above, the market appears to have gone through four phases of the Bitcoin Accumulation Trend Score during this period.
After the all-time high back in November, investors aggressively accumulated the “dip” when the value of the indicator was almost exactly 1. This marked the first of these phases.
As the price slowly fell, these last accumulators made significant losses. This led to the owners shifting to a distribution trend.
In the third phase, although the price plunged even harder when the LUNA collapse took place, investors again began to rally as if trying to catch the bottom.
After these months of accumulation, the market finally saw a rally above $24k. But instead of continuing to buy more, holders quickly seized this opportunity to exit liquidity and engaged in profit taking.
As a result of this distribution, this new fourth phase has observed trend score values for Bitcoin accumulation close to zero.
BTC price
At the time of writing, Bitcoin’s price is hovering around $19.8k, down 2% in the last week. Over the past month, the crypto has lost 15% in value.
The chart below shows the trend in the price of the coin over the last five days.
Looks like the value of the crypto is still moving sideways | Source: BTCUSD on TradingView
Featured image from Yiğit Ali Atasoy on Unsplash.com, charts from TradingView.com, Glassnode.com
