Bitcoin Accumulation Trend Score Plunges: Is a Deeper Market Correction Imminent?
Recent on-chain data reveals a significant downturn in Bitcoin’s Accumulation Trend Score, signaling a shift in investor behavior from accumulation to distribution. This alarming trend, highlighted by leading on-chain analytics firm Glassnode, suggests a potential continuation of the bearish market sentiment.
A Score Telling a Story
The Accumulation Trend Score, a crucial metric developed by Glassnode, assesses the net accumulation or distribution of Bitcoin across various investor cohorts. It doesn’t simply track balance changes; it weighs these changes against the size of investors’ holdings, providing a more nuanced picture of market dynamics. A score near 1 indicates significant net accumulation by large entities or numerous smaller addresses, while a score closer to 0 suggests distribution or a lack of buying pressure.
The Red Flag: A Score of 0.21
Currently, the Bitcoin Accumulation Trend Score sits at a precarious 0.21. This is a stark contrast to the vibrant blue period observed in late 2024, which coincided with a significant price rally fueled by heavy whale accumulation. The recent sharp decline paints a concerning picture, indicating a potential shift towards a sustained bearish trend.
Whale Activity: A Key Indicator
Glassnode’s data further reveals a worrying trend amongst mega-whales (holders of over 10,000 BTC). Since September, these large investors have consistently been selling, with the pace intensifying in recent weeks. Even smaller whale cohorts (1,000-10,000 BTC) are participating in significant selling pressure, adding weight to the bearish outlook. While other investor cohorts initially bought during the rally, they too have recently joined the selling spree.
What This Means for Bitcoin’s Price
The sustained red coloration on the Accumulation Trend Score chart casts a long shadow over Bitcoin’s immediate future. Unless a reversal is observed, and the blue color returns, the current bearish trend might continue. At the time of writing, Bitcoin is trading around $93,900, reflecting a more than 3% decline in the past week, further validating the concerns raised by the declining Accumulation Trend Score.
Disclaimer: This analysis is based on publicly available on-chain data and does not constitute financial advice. Always conduct thorough research and consult with a financial advisor before making any investment decisions.
Source: Glassnode