When bitcoin surpassed $ 50,000 in February, there was weakness in the market.
This time, from the little fish to the whales are accumulating.
Through the indicator of the Participation Score in the bitcoin accumulation trend, a study by the analytical firm Ecoinometrics explains how the bitcoin market has strengthened since the first time the price surpassed the barrier of USD 50,000 in February of this anus.
To do this, it compares the accumulation trends of five cohorts of holders and establishes a clear difference between the accumulation patterns of that moment and the current ones.
Ecoinometrics uses in this analysis the metric of the Participation Score in the trend of accumulation of bitcoin. This indicator takes groups of addresses, from the little fish (addresses with less than 1 BTC), to the whales (addresses with between 1,000 BTC and 10,000 BTC), and observes whether, on average, have been accumulating or not in the last 30 days.
From blue to red: more cohorts of holders accumulate bitcoin
The study uses a chromatic scale to identify, on the price curve, the categories of holders that accumulate bitcoin. A low value engagement score (blue in the bottom graph) is interpreted as that, on average, over the past 30 days most of the small groups of holders have been accumulatingEcoinometrics notes.
On the other hand, a high participation score (red in the graph) means that almost all direction groups, from small fish to whales, are accumulating, the study states.
Although the mere detection of the addresses that accumulate bitcoins does not allow to predict the price immediatelyThe fact that most people accumulate is perceived as a bullish sign, according to the study. This perception is based on both the resulting supply shortage and general market sentiment, the report says.
With these premises, the following graph shows the evolution of the participation score from the beginning of the year to the present.
The study highlights that by the time bitcoin crossed $ 50,000 for the first time, the engagement score had already started to weaken.
This follows because the curve becomes increasingly blue, once the crossing occurs, in mid-February. This implies that progressively there were fewer categories of holders accumulating. In the subsequent crossing, in March, according to the graph, only holders with less than 1 BTC (more intense blue) were accumulating.
In this context of market weakness, despite the rising price, any negative event, or associated with fear, uncertainty and doubt (FUD, for its acronym in English), it was probably going to result in negative price actionthe report states.
“Again, we are not saying that this blue zone predicts that the price will go down. But it does suggest a certain weakness in the market, “the report points out. Ecoinometrics points out that it is not the first time that bitcoin has crossed this barrier, since it did so in February and March of this year. However, he reiterates that market conditions are different today.
This time we are crossing over $ 50,000 again with the participation score on the rise and already in the orange zone! So yes, this time it is different. We are heading back towards the all-time high with positive on-chain momentum in the chain.
Given that the participation score offers a high-level averaged view, according to the study, the authors present another graph broken down by cohort of holders.
The accumulation of BTC by cohort of holders
From the analysis of each holder category, in the upper part of the graph, it is deduced if it is shedding its BTC (trend towards blue) or if it is accumulating (trend towards red), according to the chromatic scale shown.
In the last two weeks, the emergence of a contrast is being registered, says the study. “For one thing, addresses that control less than 10 BTC are constantly piling up satoshis,” the authors highlight. This is evidenced by the intense yellow in these cohorts, in the mentioned period.
“The addresses that control 10 to 1k BTC have become more neutral,” says the study, as those two categories are shown with larger areas in blue. Whales, meanwhile, have been accumulating more slowly, since the red shows a gradient towards yellow, the authors affirm.
So to put it another way, we are not in a situation where only the small fish are piling up and everyone else is dumping their coins. This is different from what bitcoin experienced earlier this year. This time the market is clearly in a healthier state.
In summary, from the accumulation patterns of the different segments of the previous graph, they allow us to infer that the bitcoin market appears more robust, than the one at the beginning of the year.
The study raises that there is an unknown on the development of the price in the future. “The real challenge now is to gain enough momentum for Bitcoin to move into the six-figure range in the coming months. For that to happen, we probably don’t want to see a big divergence in the accumulation trend between small fish and whales, ”says the report by way of conclusion.
This graph shows the percentage changes of the BTC held in the hands of the little fish (less than 1 BTC), and of the holders with between 100 BTC and 1,000 BTC. The price of BTC is shown through the color of the dots on the curve, from white for $ 10,000, before the November rally, to dark blue for $ 65,000 in mid-April.
In a recent analysis by Willy Woo, published this Monday by CryptoNews, this analyst points out that long-term bitcoin investors have entered a sales phase and that a flow of incoming BTC has been noticed in exchanges, greater than normal. . This offers downward pressure on prices, Woo says.