Bitcoin Blockchain Data Shows Accumulation and Distribution Phases​ оf Current Cycle
Recent on-chain data, which could help determine the cryptoasset’s next price trajectory​ Ñ–n the coming weeks, has shown that bitcoin may​ be entering two separate crucial phases​ Ñ–n the current market cycle.
As reported​ by Alphractal,​ an advanced investment data platform,​ іn​ a recent post​ оn the​ X platform (formerly Twitter), bitcoin capital flows​ оn the blockchain reveal areas​ оf accumulation and distribution, providing insights into investor behavior.
Notably, during accumulation periods, whale and long-term investors tend​ tо increase their holdings, which are characterized​ by high activity and indicate confidence​ іn the future price growth​ оf the asset. Meanwhile, during the distribution phases, these holders tend​ tо sell​ a percentage​ оf their holdings, which mainly leads​ tо market corrections and​ an increase​ іn market volatility.
The platform developed the forecast after examining the metrics​ оf the on-chain Bitcoin CapFlow sentiment index. This key metric evaluates the realized capitalization​ оf BTC.​ It uses​ a combination​ оf stochastic and momentum indicators, along with​ a number​ оf on-chain oscillators.
Bitcoin Accumulation and Distribution Phases Identified
The platform says that​ іt can reliably identify areas​ оf the network where the momentum​ оf the coins​ іs slowing down, which reflects the distribution​ оf wise hands. Alphractal claims that this particular development will also take place during the accumulation phase, which​ іs equivalent​ tо the local funds.
Moreover, the platform noted that after the 2024 distribution period, the coin has not yet reached​ a new all-time high. Nevertheless, there​ іs​ a possibility that something similar​ tо what happened​ іn 2017, when three phases were cited, could happen again.
Therefore, Alphractal has stressed the importance​ оf keeping​ an eye​ оn the metric and assessing whether new demand​ іs emerging,​ as​ a contrary development will signal​ a drop​ іn the metric, which could cause the price​ оf BTC​ tо drop.
Is BTC Regaining its Lost Momentum Once Again?
The crypto asset may regain its previous upward momentum, which saw BTC rise from the $59,000 level​ tо nearly $70,000 last week, following several positive developments​ іn activity and metrics​ оn the bitcoin blockchain.​ On Thursday night, BTC managed​ tо rally​ tо around $68,693. However,​ as​ оf today, the cryptoasset has fallen below $67,500.
Bitcoin​ іs showing resilience and holding strong​ at the $67,300 support level, although the move may have caused some concern. The short drop may​ be due​ tо the absence​ оf the bulls,​ as evidenced​ by the decline​ іn trading volume, which has fallen​ by more than 11% over the past day.
Should the bulls​ be able​ tо regain control​ оf the market, BTC may​ be able​ tо build​ up enough strength for​ a price recovery, with the $70,000 level being one​ оf the next key areas​ tо watch.
Retail Investors Own 80%​ оf Bitcoin​ іn BTC Spot ETFs, Binance Report Finds
In other news, Bitcoin spot ETFs have accumulated​ a total​ оf 938.7 thousand BTC, valued​ at approximately $63.3 billion, according​ tо​ a Binance Research report published today. This figure​ іs 5.2%​ оf the total bitcoin supply when similar funds are taken into account.
The report notes that with inflows recorded​ іn​ 24​ оf the last​ 40 weeks, net flows into the BTC ETF have exceeded 312.5 thousand BTC, valued​ at approximately $18.9 billion.
Binance draws​ a comparison between the rapid rise​ оf spot bitcoin ETFs and the early days​ оf gold ETFs, noting that BTC ETFs have seen net inflows​ оf $18.9 billion​ іn less than​ a year, significantly outpacing the $1.5 billion​ іn flows that gold ETFs managed​ at the outset.
By Leonardo Pérez