Bitcoin Accumulation Analysis Indicates Weak Mid-Term Potential
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Recent insights from the on-chain analytics company Glassnode reveal that Bitcoin is currently experiencing a phase of limited accumulation, particularly evident during its recent consolidation.
In a post shared on X, Glassnode addressed the current trends in Bitcoin’s Cost Basis Distribution (CBD), particularly among short-term holders. This metric reflects the price levels at which Bitcoin supply was acquired historically.
Focusing on the short-term holders (STHs), the CBD tracks supply purchased within the last 155 days. Due to the short duration, this metric tends to thin out over time as coins either change hands at different price points, thereby resetting their cost basis, or transition into long-term holder status beyond the 155-day threshold.
According to the chart provided by Glassnode, the STH CBD saw an increase in supply during the price lows of November, indicating a significant amount of new accumulation in response to a substantial market downturn.
This concentration of supply acted as a foundational support for Bitcoin, contributing to its stabilization during a consolidation phase. However, the persistent bearish trend eventually drove the price below this cluster, suggesting that the involved tokens are currently at a loss.
In addition to the robust supply zone created at the lower end of this range, the consolidation period between November and January also saw some higher price levels being filled with supply. Although this subsequent accumulation was not as robust as at the lows, it indicated that trading activity was taking place.
As Bitcoin has entered another sideways trading period, the recent data indicates a lack of strong buying interest compared to previous phases. Some supply is indeed beginning to find its way into a cost basis within the current range, but Glassnode observed that this accumulation cluster, situated between $62,000 and $72,000, lacked the intensity typically associated with pre-expansion phases.
The future trajectory of this supply range remains uncertain. Currently, Glassnode assesses that the foundational support for a mid-term breakout remains fragile.
As of the latest updates, Bitcoin is trading at approximately $71,100, representing an increase of nearly 5% over the past week.
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Raj Patel
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