Key Points
- Bitcoin’s Accumulation Trend Score is nearing zero, indicating increased coin distribution by larger entities.
- Decreased activity on the Bitcoin network and a rise in coins sent to exchanges suggests a potential increase in sell-offs.
Bitcoin’s Accumulation Trend Score, a metric that tracks the buying and selling activity of different Bitcoin wallet cohorts, has been trending towards zero. This indicates that larger entities are either distributing their holdings or not accumulating more coins.
Bitcoin’s Narrow Price Movements
The move towards a lower Accumulation Trend Score could be due to the coin’s narrow price movements in recent weeks. Bitcoin has been facing significant resistance at the $63,000 price level. At the time of writing, the leading cryptocurrency was trading at $62,003.
On-chain data confirms this decline in accumulation by Bitcoin’s larger wallet groups. The number of unique addresses holding at least 1k coins has decreased in the last 30 days. Furthermore, there has been a 27% decrease in the number of unique addresses active on the network.
Decrease in New Demand
During the same period, the demand for new Bitcoin addresses has also dropped. The number of unique addresses that appeared for the first time in a Bitcoin transaction has decreased by 35% over the last 30 days.
Interestingly, while the daily count of active and new addresses trading Bitcoin has dropped, the number of coins sent to cryptocurrency exchanges has surged. At the time of writing, 2.33 million Bitcoin were held on exchange addresses, growing by 1% in the last month.
When Bitcoin’s exchange reserve increases in this manner, it suggests a rise in the coin’s sell-offs. This could make it challenging for Bitcoin bulls to break above the $63,000 resistance level in the short term, especially if the general market continues to gain momentum while new demand for Bitcoin decreases.
