Bitrabo Editorial
A recent update from Glassnode’s “Week Onchain” newsletter highlights a notable change in the Bitcoin market dynamics as long-term holders and significant investors are reverting to an accumulation trend. This transition from a distribution phase earlier in the year signals a potentially bullish outlook for Bitcoin, amid the ongoing market volatility.
Positive Signs for Bitcoin
Following a period of extensive distribution post the March 2024 all-time high, the market is now witnessing a reversal in this trend, especially noticeable among large wallets associated with institutional investors and ETFs moving towards accumulation.
The Accumulation Trend Score (ATS), a metric evaluating market-wide balance changes, has reached its peak value, indicating substantial accumulation over the past month. Additionally, Long-Term Holders (LTHs) have added around 374,000 BTC to their holdings in the last three months after a period of significant divestment.
Long-Term Holders, essential in the Bitcoin ecosystem, are now showing a strong inclination towards holding onto their coins. The positive change in the LTH supply over seven days underscores reduced selling activity and an increased focus on accumulation.
Challenges Ahead
Despite the positive indicators, challenges persist. The Cumulative Volume Delta (CVD) metric, reflecting the net balance between buying and selling pressure in spot markets, shows a consistent net sell-side pressure over the past two years.
An adjusted version of the CVD metric suggests a potential link with the recent failure to breach the $70,000 resistance level, indicating weak spot demand. However, a recovery in demand could be anticipated if the adjusted CVD returns to positive territory.
The ongoing accumulation by LTHs amidst price volatility highlights a resilient and patient holder base. These holders, with a significant share of Bitcoin network wealth, appear hesitant to sell at current prices, potentially aiming for higher levels before considering distribution.
With the long-term investors showing restrained profit-taking behavior and maintaining their positions, the return to accumulation by Bitcoin holders, especially LTHs, presents a positive signal for the market. This strategic focus on accumulation amidst market uncertainty could pave the way for a substantial upward movement in Bitcoin prices.
Bitcoin is currently trading at $59,138.