Bitcoin On-Chain Data Shows Phases Of Accumulation And Distribution In Current Cycle

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As a seasoned crypto investor with battle-scarred eyes from navigating the wild west of digital assets, I find myself intrigued by Alphractal’s analysis of Bitcoin’s current market cycle. The insights into accumulation and distribution phases offer a unique vantage point, allowing us to discern the intentions of whales and long-term holders.

Current blockchain information suggests that Bitcoin could be moving into two significant stages within the existing market trend, which may influence its price direction over the upcoming weeks.

Bitcoin’s Accumulation And Distribution Phases Identified

The movement of capital associated with Bitcoin on its blockchain is showcasing areas of accumulation and distribution, shedding light on investor tendencies, according to a recent update by Alphractal, an innovative investment data provider, shared on the X (previously known as Twitter).

It’s important to recognize that when Bitcoin is accumulating, whales and long-term investors often increase their Bitcoin holdings significantly, which are marked by increased activity and suggest optimism about the asset’s potential price rise in the future. Conversely, during distribution periods, these holders typically sell a portion of their holdings, often resulting in market corrections and increased market volatility.

After studying the On-chain CapFlow Sentiment Index for Bitcoin, the platform derived its prediction. This essential metric estimates Bitcoin’s realized capitalization by blending momentum and stochastic indicators, together with several on-chain oscillators.

Based on the information provided, The platform suggests that this indicator accurately identifies parts of the network where the movement of coins begins to slow down and weaken, indicating distribution by knowledgeable traders. Alphractal also notes that this phenomenon occurs during accumulation stages, which often coincide with local market bottoms.

In addition, it was mentioned that by the year 2024, Bitcoin had concluded its distribution period but hadn’t set new record highs yet. Nevertheless, there’s speculation that a series of events similar to what transpired in 2017, which involved three distinct phases, could reoccur.

In summary, monitoring the specific metric and determining if new demand is emerging is crucial for Alphractal. A reverse trend could indicate a decrease in this metric, which might lead to a fall in Bitcoin’s price.

BTC Regaining Its Lost Momentum Once Again?

There’s growing optimism about Bitcoin as its on-chain activities and performance indicators have shown improvement, potentially signaling a return of its bullish trend. In the last seven days, we saw BTC soar from around $59,000 to almost $70,000.

Bitcoin saw a surge to approximately $68,693 on Thursday, but has since fallen below $67,500 as of today. This dip might have raised some worries, but Bitcoin is showing signs of strength by maintaining its position above the $67,300 support level.

Over the past day, trading volume has decreased by more than 11% possibly because the bulls are absent from the market. If the bulls regain control, Bitcoin (BTC) could accumulate enough momentum for a price increase. A significant level to keep an eye on in this scenario is around $70,000.

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2024-10-26 02:41