Bitcoin’s volatile start to saw a dramatic plunge to $60,000 on , following a period where the cryptocurrency traded around $80,000. However, the sharp decline has triggered a significant shift in investor behavior, with broad-based accumulation now emerging across nearly all wallet sizes, suggesting a potential stabilization after a period of intense selling pressure.
The recent downturn represents one of the most severe capitulation events in Bitcoin’s history, with the price falling more than 50% from its peak in . This capitulation, however, appears to be evolving into a more synchronized accumulation phase, indicating that investors are beginning to perceive value at lower price levels.
Data from Glassnode reveals a notable increase in the Accumulation Trend Score by cohort, a metric designed to measure the relative strength of accumulation across different wallet sizes. The score considers both the size of the wallet and the amount of Bitcoin accumulated over the past 15 days, with a score closer to 1 indicating accumulation and a score closer to 0 indicating distribution. Currently, the aggregate Accumulation Trend Score has risen above 0.5, reaching 0.68 – the first time this has occurred since late , a period that previously coincided with a local bottom near $80,000.
The most aggressive dip buying has been observed among wallets holding between 10 and 100 BTC. This suggests that investors with a substantial, but not overwhelmingly large, Bitcoin holdings are actively taking advantage of the price decline to increase their positions.
The market’s reaction follows a period where whales – large holders of Bitcoin – were cautiously testing the waters while retail investors were exiting positions. The shift towards accumulation suggests a change in sentiment, with investors now more willing to enter or increase their positions despite the recent volatility.
The recent price action is occurring against a backdrop of broader macroeconomic uncertainty and fluctuating investor risk appetite. The end of the US government shutdown, as noted in recent reports, may contribute to a more stable market environment and potentially bolster confidence in risk assets like Bitcoin. However, the impact of this event remains to be fully assessed.
While the recent accumulation trend is encouraging, it remains uncertain whether the ultimate bottom has been reached. The market is still navigating a complex landscape of macroeconomic factors and investor sentiment. However, the current data suggests that investors are once again finding value in Bitcoin after a significant drawdown.
Adding to the complexity, data indicates substantial outflows from spot markets. On , spot outflows reached $91.36 million, contributing to nearly $1 billion in outflows over three days as institutional ETF withdrawals accelerate. Deutsche Bank analysts have attributed this slide to massive withdrawals from institutional ETFs, suggesting a potential shift in institutional investment strategies.
The selling pressure from whales has been significant. Whale and shark wallets – those holding between 10 and 10,000 BTC – have collectively reduced their control over the total Bitcoin supply to 68.04%, the lowest level in nine months. This group offloaded approximately 81,000 BTC in eight days leading up to , increasing the circulating supply and contributing to the downward momentum. While the pace of selling has slowed slightly, the overall trend remains one of distribution.
Conversely, smaller “shrimp” addresses – those holding less than 0.1 BTC – have risen to a 20-month high, now accounting for 0.249% of the total supply, or roughly 52,290 BTC. This suggests that retail investors are actively accumulating Bitcoin during the dip, potentially anticipating a future price recovery. However, analysts caution that the combination of large holders selling while retail investors buy has historically been a precursor to bear cycles.
The current market situation presents a complex interplay of forces. While the accumulation trend is a positive sign, the ongoing outflows from spot markets and the continued distribution by large holders suggest that the market remains vulnerable to further downside risk. Investors will be closely monitoring these trends in the coming weeks to assess the potential for a sustained recovery.
