Advertisement
AD

Main navigation

Bitcoin Enters Accumulation State: On-Chain Data

Advertisement
Wed, 22/12/2021 - 10:20
Bitcoin Enters Accumulation State: On-Chain Data
Cover image via stock.adobe.com

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

Read U.TODAY on
Google News
Contents
Advertisement

Glassnode on-chain analytical service has published interesting data that suggests Bitcoin is entering the accumulation zone after one of the strongest capitulations in the cryptocurrency's history.

Illiquid supply indicator

According to the volume of the illiquid supply on the chain, BItcoin has exited the capitulation state, and now wallets are sending their funds to entities that prefer being inactive rather than constantly making numerous transactions during the day.

The indicator also suggests that the eight-month accumulation-distribution period during which Bitcoin reached its previous ATH was over at the end of May. Back in June, capitulation rates increased and peaked close to September, after which Bitcoin had another pump to $65,000.

The volume of the illiquid supply has reached 100,000 BTC per month which indicates that traders are moving more than or close to 100,000 Bitcoins on inactive wallets that are known for having little or no transaction histories.

The indicator also correlates with the exchange inflow and outflow rate. With more traders and investors moving funds to inactive wallets, exchange inflows should start dropping significantly.

Does the indicator reflect the price action?

With an indicator showing entry into the accumulation zone, traders might expect the appropriate price action. According to the Bitcoin/USD trading pair, the correlation is in fact being confirmed, with Bitcoin gaining 6.5% in the last week.

Related
Shiba Inu Listed by Australia's Longest-Running Crypto Exchange

During the capitulation period, Bitcoin lost more than 38% of its value with the illiquid supply movement dropping to -130,000 Bitcoin per month. The reversed values of the indicator mean that traders were moving their funds from illiquid wallets to exchange addresses or wallets with high transactional activity.

Advertisement
TopCryptoNewsinYourMailbox
TopCryptoNewsinYourMailbox
Advertisement

Latest Press Releases

Our social media
There's a lot to see there, too

Popular articles