Bitcoin Whales Return to Distribution, Indicating Bearish Outlook
According to analyst James V. Straten, Bitcoin whales with holdings of over 10,000 BTC have shifted from accumulation to distribution, potentially signaling a bearish sentiment for the cryptocurrency’s price.
Tracking Accumulation and Distribution with Glassnode
Glassnode’s “Trend Accumulation Score” is a key indicator that monitors whether Bitcoin investors are buying or selling. This metric analyzes balance changes in holders’ addresses and places greater importance on larger entities.
A score close to 1 indicates a trend of net accumulation, while values nearing zero suggest distribution is dominant.
Changes in Investor Behavior
Since the beginning of the year, various investor groups have experienced shifts in their Trend Accumulation Scores. In September, most groups continued selling except for the largest cohort, holders with over 10,000 BTC.
These mega whales initially accumulated during the month but have recently shown a shift towards distribution. The stagnant market may have influenced their change in behavior.
Concerns Over Market-Wide Selling
The overall market has seen significant selling activity, as indicated by deep red Trend Accumulation Scores for various investor cohorts. This could be a worrisome sign for Bitcoin and may foreshadow a drawdown in the near future.
BTC Price Consolidation
Bitcoin has been consolidating around $26,200 since the August crash.
Hot Take: Bearish Outlook as Bitcoin Whales Resume Distribution
The return of Bitcoin whales to distribution suggests a bearish sentiment for the cryptocurrency’s price. While mega whales initially accumulated Bitcoin, they have shifted their behavior towards distribution, possibly due to the stagnant market. This change in investor behavior, coupled with market-wide selling, raises concerns about a potential drawdown in the near future. Bitcoin’s consolidation around $26,200 adds further uncertainty to its price trajectory. Investors should closely monitor these developments and consider adjusting their strategies accordingly.
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