Glassnode’s new Bitcoin indicator, the “Accumulation Trend Score”, shows that the market has recently tilted towards distribution.
Bitcoin’s accumulation trend score recently showed values from 0.2 to 0.5
According to the latest weekly report from glass knotThe latest addition to the on-chain market intelligence firm’s indicators suggests the trend has been retail in recent weeks.
The “accumulation trend score” keeps track of the overall accumulation or distribution of Bitcoin by investors’ wallets.
According to Glassnode, “This tool tracks when large entities (i.e. whales) and/or large parts of the market (i.e. shrimp in large numbers) add to their holdings. to pieces, while filtering miners and exchanges”.
When the value of this indicator is closer to 0, it means that the market is currently distributing or there is not much accumulation going on. Such a trend may be bearish for the crypto price.
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On the other hand, the metric showing values close to 1 suggests that investors are accumulating right now, as their balances are increasing significantly.
Now, here is a graph that shows the trend of Bitcoin’s accumulation trend score over the past two years:
Looks like the value of the indicator has been closer to zero recently | Source: Glassnode's The Week Onchain - Week 11, 2022
As you can see in the graph above, between October 2021 and January 2022, the value of Bitcoin’s accumulation trend score remained above 0.9, implying that a strong accumulation took place at the during the period.
However, for most of 2022 so far, the metric has been floating between 0.2 and 0.5, meaning the market trend has been one of net distribution recently.
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The weak accumulation during this period seems to be due to the various macroeconomic uncertainties weighing on the markets in 2022.
One of the main sources of such uncertainty is the Russian invasion of Ukraine, which continues as the war rages on.
As of this writing, the price of Bitcoin is hovering around $38.7,000, down 0.5% in the past seven days. Over the past month, the crypto has lost 9% in value.
The chart below shows the price trend of BTC over the past five days.
BTC's price seems to have mostly moved sideways over the past few days | Source: BTCUSD on TradingView
Bitcoin price has shown no significant movement for a while now as the value of the crypto continues to consolidate between the $40,000 and $35,000 levels
Currently, it is unknown when the coin can escape from this limited environment. However, going by the accumulation trend, the signs look bearish for the crypto.
Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com