- Large BTC holders are no longer in accumulation mode.
- Although net take-off volume was in deep negative territory, trader sentiment remained upbeat.
Bitcoins [BTC] On-chain activity has seen a significant shift recently, marking a departure from the previous accumulation trend. For BTC price action, the balance between accumulation and distribution is critical to understanding market sentiment. And one metric that explains this is the Accumulation Trend Score.
To read Bitcoins [BTC] price prediction 2023-2024
Analysis of the metric suggests a transition towards wider adoption of Bitcoin. The indicator for market behavior is the accumulation trend score reflects the number of new coins accumulated or sold within a given period of time.
The power has changed hands
When the accumulation trend value is closer to one, it means large companies are accumulating. However, if the indicator approaches zero, this indicates a shift towards selling. At press time, the Bitcoin accumulation trend value is 0.05, suggesting that sentiment among large holders is leaning towards the latter.
Source: Glassnode
Formerly, AMBCrypto reported that whales accumulated Bitcoin in large numbers. And this action was instrumental in propelling the coin above $30,000 at times. Therefore, the shift in sentiment may have impacted the recent consolidation that BTC has been struggling with.
If this metric continues to hold, BTC’s consolidation or decline could continue. Additionally, on Aug. 12, CryptoQuant analyst JA_Maartunn pointed out that BTC’s inability to rise could be related to net taker volume.
The Net Taken Volume measures the difference between purchase and sales volume of bitcoin futures contracts. The analyst referenced 2021 when looking at the metric for historical usage and said:
“In May 2021, Bitcoin was trading at around $60,000 Taker Sales Volume was $600 million higher than Taker Buy Volume. This indicates strong selling by market orders, although the price was still high.”
So if the net take volume is clearly positive and the price is relatively low, it means that aggressive buying is taking place. But Bitcoin’s case was different. According to the chart shared by Maartunn, net take-up volume was negative, indicating strong selling pressure.
Source: CryptoQuant
Still, the enthusiasm prevails
Despite the strong selling pressure, Santiment revealed that funding on Binance was 0.01%. A positive funding rate means traders are long Dominant and willing to pay short traders financing.
Conversely, a negative funding rate means that short traders are paying a funding fee to long traders to keep their positions open. Therefore, the timing of the metric’s release suggests that bullish sentiment was thriving.
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Source: Santiment
However, traders may need to watch out for continued accumulation and distribution. If bitcoin distribution continues to accelerate, it is only a matter of time before some long positions are liquidated. That is when the BTC price drops sharply.
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