Bitcoin (BTC) appears to be ending its year-long accumulation phase that began after the 2022 bear market, according to data from Glassnode, an on-chain analytics firm. The number of BTC held in accumulation addresses is declining for the first time since the first quarter of 2023. This decline started on February 11, breaking a year-long tradition, as BTC/USD reached $48,000, which is the top of a significant long-term trading range. Accumulator balances have since fallen 2.6% to 3,176,293 BTC ($212 billion) and show no signs of reversing. However, this decline is not necessarily bearish, as accumulator wallets have historically spent a long time accumulating coins at a discount before selling them at the start, rather than the end, of parabolic uptrends.
Looking at the broader picture, there has been a consistent accumulation trend in place since mid-2018, which contrasts with a significant reduction in accumulation prior to that. This reduction began in 2016, just as Bitcoin started to reach its previous all-time high of $20,000.
The launch of the United States spot-Bitcoin exchange-traded funds (ETFs) in January has had a unique impact on supply dynamics. This has led to steady buying pressure and phenomena never seen before, such as hitting an all-time high before a block subsidy halving. Timothy Peterson, founder and investment manager at Cane Island Alternative Advisors, suggests that if this trajectory continues, ETF demand could push Bitcoin to reach a price of $100,000 by October 2024. He bases this prediction on the growth of unspent transaction output (UTXO) numbers, which have been increasing at a rate of 0.34% per day compared to BTC price performance.
It’s important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any investment or trading decisions.