Recent on-chain data indicates that the largest Bitcoin whales, a group traditionally viewed as influential in the market, have shifted from accumulation to distribution, which could potentially signal a bearish trend for the cryptocurrency’s price.
Investors holding more than 10,000 BTC, often referred to as “mega whales” due to their substantial holdings, had been in an accumulation phase earlier. This behavior change is tracked using the “Trend Accumulation Score” provided by Glassnode. This score assesses whether Bitcoin investors have been buying or selling over the past month by analyzing balance changes in their addresses.
The score gives more weight to larger entities, so the actions of a few major holders have a more significant impact on the indicator than those of smaller investors. When the Trend Accumulation Score is close to 1, it indicates a trend of net accumulation in the market. Conversely, values near zero suggest that distribution is the prevailing behavior.
Here’s how the Trend Accumulation Score has evolved for various Bitcoin investor groups since the beginning of the year:
- Throughout August, the entire Bitcoin market exhibited a trend of net distribution, with the accumulation trend score leaning toward zero. During this period of selling, Bitcoin experienced a significant price decline.
- At the start of September, most investor groups continued to sell, but notably, the largest cohort consisting of holders with over 10,000 BTC began accumulating again.
These “mega whales” initially saw value in accumulating more Bitcoin earlier in the month. However, there has been a recent shift in their behavior, with the Trend Accumulation Score declining and leaning towards distribution. This suggests that despite considering earlier price lows as ideal entry points, the lack of significant price movement may have caused them to change their minds.
It’s worth noting that, currently, the mega whales are not dumping Bitcoin on a massive scale. However, other investor cohorts have been actively selling, as indicated by their deep red Trend Accumulation Scores. This widespread selling across the market raises concerns and could be a precursor to a potential price decline for the cryptocurrency in the near future.