Bitcoin Accumulation Trend Score Stays Below 0.5 Amid Price Recovery, What Does This Mean?

While Bitcoin‘s recent upward movements were quite remarkable after struggling with bearish pressure for weeks, the flagship asset’s uptrend was short-lived, leading to a pullback to the $85,200 threshold. During the fluctuating performance, investors seem to have lost interest in BTC as there was no sign of accumulation.

Accumulation Trend Score At Low Levels

In an insightful research, Glassnode, a leading on-chain data and financial platform has outlined a persistent trend in Bitcoin’s current market dynamics and sentiment. As BTC moves sideways, the platform highlights that accumulation has remained significantly low.

After delving into Bitcoin’s Accumulation Trend Score metric, Glassnode points to a consistent positioning below 0.5, signaling that large-scale accumulation among investors is relatively weak despite recent price fluctuations. 

Specifically, this measure, which monitors the level of Bitcoin accumulation by various market players, indicates that some investors are continuing to purchase while the general trend indicates a decline in accumulation activity.

Data shows that the metric has remained below 0.5 for over 58 consecutive days, marking a prolonged net distribution period. Furthermore, The current streak is drawing closer to the average length of distribution periods across a one-year span, which indicates that it is still consistent with previous patterns.

Glassnode noted that the average duration of distribution phases and accumulation cycles over the last 1 year was 65 days and 57 days, respectively. Overall, BTC was in relative accumulation above the 0.5 point for 170 days and in relative distribution below 0.5 for about 196 days.

Meanwhile, the periods of accumulation and distribution have alternated between 57 and 65 days. Given that the most current reading is at 0.9, the trend score shows that big entities are still in a net distribution regime and have not yet been confirmed that they are moving into accumulation. With whales and long-term investors showing less aggressive buying pressure, Bitcoin’s price could face an extended pullback to lower key support levels. 

BTC Short-Term Holders In A Fragile Position

Short-term BTC holders have also been driven to a precarious position as the price fluctuates. Prior to the sudden drop on Monday, BTC briefly recovered its Short-Term Holder Cost Basis, but it is currently trading slightly below the level. 

Meanwhile, Glassnode noted that Bitcoin’s short-term holder Market Value to Realized Value (MVRV) is at 0.00, reflecting a paper decrease of 1%. This shows that STHs are still in a fragile position since their profitability is close to breakeven.

BTC’s short-term holder SOPR has witnessed a decline during bearish price performances. The metric fell significantly below its quarterly median last week. However, it has since rebounded to its upper deviation band, which might signal renewed demand absorption and improve sentiment following a capitulation by short-term holders.