Key Points
- Accumulation addresses have been stockpiling Bitcoin (BTC), potentially indicating a trend reversal.
- Despite recent price drops, buying pressure remains high, suggesting a possible return to a bull market.
Bitcoin’s (BTC) price has recently slowed down, hovering around $61k. However, this price movement might not tell the whole story, as many investors are using this opportunity to accumulate more BTC.
Bitcoin Accumulation
Data from CoinMarketCap showed a significant price correction for BTC last week, with its value dropping by over 9%. In the last 24 hours alone, BTC’s value declined by more than 4%. Despite these declines, the cryptocurrency was trading at $61,727.17 with a market capitalization of over $1.22 trillion at the time of writing.
An analysis by caueconomy, an author and analyst at CryptoQuant, shed light on an intriguing development. The analysis used the accumulation addresses metric, which tracks addresses with no outgoing transactions, excluding miners and exchanges. This metric indicates interest in long-term accumulation.
Impact on Bitcoin’s Price
According to the analysis, accumulation addresses reduced the absorption of coins between April and May. However, from June onwards, this dynamic shifted. “Recently, these addresses accumulated around 72.5 thousand BTC and in the last 30 days, they saw daily inflows of 12.5 thousand BTC. If this trend continues, it could positively influence market prices,” the analysis noted.
Furthermore, data from CryptoQuant showed a decrease in BTC’s exchange reserve, indicative of high buying pressure. The binary CDD was greed, suggesting that long-term holders’ movement in the last 7 days was lower than the average, implying a motivation to hold onto their coins.
With high accumulation, it’s possible that BTC’s price might be preparing for a trend reversal. However, both the Money Flow Index (MFI) and Chaikin Money Flow (CMF) registered downticks, suggesting that BTC might continue to remain bearish.
If the downturn continues, BTC could drop to $60k. However, in the event of a trend reversal, BTC might first reclaim the $67k mark.
