Bitcoin Yet To See Meaningful Capital Return, Glassnode Says

[Ben Graham]

On-chain analytics firm Glassnode has highlighted how accumulation from the large Bitcoin entities has remained relatively weak recently.

Bitcoin Accumulation Trend Score Has Been Struggling To Break 0.5

In a new post on X, Glassnode has talked about the latest trend in the Accumulation Trend Score for Bitcoin. This on-chain indicator tracks whether BTCinvestors are accumulating or distributing right now. The metric calculates its value by looking at the balance changes happening in the wallets of the investors. Additionally, it also accounts for the size of the wallets themselves. This second weighting factor means that larger entities have a stronger influence on the indicator.

When the value of the Accumulation Trend Score is greater than 0.5, it means large investors (or a large number of small entities) are accumulating. The closer the metric is to 1, the stronger this behavior is. On the other hand, the indicator being under 0.5 implies that distribution is the dominant behavior on the network. The extreme point on this side of the scale lies at 0.

Now, here is the chart shared by Glassnode that shows how the Bitcoin Accumulation Trend Score has changed over the course of the cycle:

As displayed in the above graph, the Bitcoin price crash in November saw the Accumulation Trend Score take on a dark purple color. Here, a light yellow shade on the indicator reflects a value close to zero, while a dark purple one to a value near 1. Thus, it would appear that the market reacted with a near-perfect accumulation behavior to the November price lows.

While December saw continued accumulation, a shift occurred in January; the price recovery rally was met with distribution as the Accumulation Trend Score turned orange-yellow. The cryptocurrency’s price has plummeted since the onset of this selling pressure.

The price crash has been met with some accumulation, but from the chart, it’s visible that the indicator’s color has still only been red. “The Accumulation Trend Score has struggled to push above 0.5 since early February,” noted the analytics firm.

While the current value suggests aggressive distribution is no longer happening, it’s not necessarily a sign of a return of demand for Bitcoin, either. As Glassnode explained, the trend reflects “persistently weak accumulation, particularly among larger entities, signalling that meaningful capital has yet to step back in.” It now remains to be seen how long the current neutral market behavior will continue and which way the next shift will lean.

BTC Price

Bitcoin slipped under the $63,000 level on Tuesday, but the market has rebounded since then as the cryptocurrency’s price has returned to $65,300.