On-chain data shows the largest of whales on the Bitcoin network have slowed down their buying recently. Here’s what this could mean for BTC.
The metric determines its value by not only looking at the balance changes happening in the wallets of the investors, but also referring to the size of the wallets themselves. This means that larger investors have a higher weightage in the indicator.
When the Accumulation Trend Score is above 0.5, it means the large investors (or alternatively, a large number of small holders) are in a phase of accumulation. On the other hand, being under this threshold implies the dominance of distribution in the market. These behaviors are at their strongest at the extreme points of 0 and 1.
Now, here is the chart posted by the analytics firm, which shows the trend in the Accumulation Trend Score separately for the different Bitcoin holder groups over the past year:
As displayed in the above graph, the investors on the lower end of the market (the below 1 BTC and 1 to 10 BTC cohorts) have their Accumulation Trend Score under 0.5, which implies they are distributing.
The story is different for the larger cohorts, who are in a phase of accumulation. The metric is sitting at 0.8 for the sharks (holders carrying 100 to 1,000 BTC) and at 0.9 for the whales (1,000 to 10,000 BTC), implying a strong trend of buying.
That said, at least for now, the sharks and whales are still supporting the run. During the rally from the last couple of months of 2024, the mega whales took to light distribution, but the rest of the market continued to accumulate, providing fuel for the run.
The rally ended when the mega whales took to heavy distribution. Just like how the buying from the cohort this year came ahead of the rest, this selloff also arrived before the rest could move.
Considering this smart-money behavior from the mega whales, their Bitcoin Accumulation Trend Score could be to keep an eye on.
The Bitcoin rally has stalled during the last few few days as the cryptocurrency is still trading around the $104,000 mark.
