On-chain analytics firm Glassnode’s data reveals that bitcoin investors have recently been aggressively accumulating the cryptocurrency, a trend that may help prolong the ongoing rally.
The “accumulation trend score” is the key indicator being analyzed, as it reflects whether bitcoin investors have been accumulating or distributing the digital asset over the past month.
The accumulation trend score not only signifies the volume of coins being bought or sold by holders, but also the wallet sizes of the participants involved in the accumulation or distribution process.
A score close to 1 indicates that large entities or a significant number of smaller investors are currently accumulating the asset. Conversely, scores approaching 0 suggest that holders are distributing or not accumulating much at the moment.
A chart displaying the trend in the bitcoin accumulation trend score over the past few years shows that during the initial months of the latest rally, the metric was closer to 0, implying that substantial distribution took place among large entities. This could indicate that investors were not confident the rally would last and were eager to secure their profits.
However, the recent trend has shifted as the price has neared $30,000. Interestingly, the present rally seems to be following a pattern similar to the April 2019 rally, which began in the wake of bear market lows and faced substantial distribution in its early stages.
When that rally neared its “cycle baseline,” investor behavior shifted toward heavy accumulation, and the indicator turned dark purple (values very close to 1). The April 2019 rally experienced a sharp upward momentum after this accumulation began.
With the price of bitcoin now approaching the $30,000 mark, the accumulation trend score has also shifted toward accumulation. This level represents the baseline of the current cycle, which bears a structural resemblance to the 2018-2019 cycle.
If the ongoing rally continues to follow the pattern of the April 2019 rally, the recent shift toward accumulation could be a positive development for the price surge. At the time of writing, bitcoin is trading around $28,200, marking a 4% increase over the past week.