On-chain data shows Bitcoin whales actively selling, is trouble brewing?

On-chain data shows Bitcoin whales are actively selling, is trouble brewing?


A new metric from on-chain data analysts glass knot examines the relative size of entities that actively hoard or distribute coins in terms of their Bitcoin holdings. In short, the “Accumulation Trend Score” measures whale activity.

The current accumulation trend score shows that whales are activity distribution tokens, suggesting a low probability of reversing the recent price drop, if this trend persists.

Since November, Bitcoin has been trending lower, having peaked at $69,000. Early February saw a break in the downtrend, but $BTC has been moving sideways ever since, posting a low of $34,300 during that time.

This state of limbo has divided opinion on whether or not we are in a bear market. However, in a context of economic uncertainty, sentiment is skewed in favor of the former.

Today’s price action sees a 3% gain accompanied by a rally in the Relative Strength Index (RSI), to 46% at the time of writing. While this shifts the momentum into overbought territory, it remains to be seen if the bulls can break the downtrend.

Bitcoin daily chart
Source: BTCUSD on

According to the data, with whales in the distribution phase, signs point to further range if not lower prices from here.

What is the Accumulation Trend Score?

the Accumulation trend score represents the size of the entities balance (their stake score) and the number of new coins acquired/sold in the last month (their balance change score).

The score is on a scale of 0 to 1. A score closer to 0 means that large entities distribute and not accumulate, while a score closer to 1 indicates that large entities accumulate and do not distribute. not.

However, a score of 1 is not necessarily correlated with a price spike or vice versa. For example, in mid-April 2021, the price of $BTC peaked at $65,000 (the highest price in 2021). But the accumulation trend score was at the low end, with April 4, 2021 showing a score of 0.

The start of 2022 opened with a score of around 0.7, indicating that whales were mostly accumulating. The current score is 0.027, which shows a complete turnaround in sentiment.

Bitcoin Accumulation Trend Score

Small fish are snapping up Bitcoin

On-Chain Analyst Data Econometrics supports the view that whales sell. However, their analysis also included looking at what “little fish” are doing, and unlike whales, retail investors are currently buying Bitcoin.

They conclude that the probability of a higher displacement is low given that the whales are irrelevant.

#Bitcoins whales and small fish… two different worlds right now. The little fish pile up like there’s no tomorrow while the whales distribute. Without the whales, I doubt there would be enough momentum for a sustained uptrend.

the FOMC meeting will take place next Tuesday or Wednesday. Analysts expect U.S. interest rates to rise by 0.25%-0.5%. While some say this will have little impact on soaring inflation, the Fed must also consider the effect of raising rates too high.

All eyes are on what the Fed does next.

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