Bitcoin's year-long buying spree, which commenced toward the conclusion of the 2022 bear market, seems to be tapering off, according to data from on-chain analytics firm Glassnode. For the first time since the first quarter of 2023, the number of accumulated BTC addresses has experienced a decline. While Bitcoin's recent all-time high may have prompted an immediate sell-off, holders were already engaged in profit-taking activities behind the scenes.
Glassnode's data reveals a reduction in tokens held in cumulative addresses, which are wallets with no outgoing transactions and at least two "non-dust" inbound transactions. This shift deviates from the year-long trend observed since February 11, when Bitcoin hovered around $48,000 against the US Dollar, marking the upper boundary of a significant long-term trading range.
The balance held by accumulators has diminished by 2.6% to 3,176,293 BTC (equivalent to $212 billion) and shows no indication of reversing. However, this phenomenon does not necessarily spell doom and gloom. Historically, accumulation wallets have undergone prolonged periods of accumulating tokens at discounted prices, only to initiate selling at the onset of a parabolic uptrend, rather than its conclusion.
Examining Bitcoin's balance throughout its existence, the broader trend of accumulation since mid-2018 remains firmly established, contrasting with the sharp drawdown observed in 2016 as Bitcoin surged to its previous all-time high of $20,000. The recent approval of a spot Bitcoin exchange-traded fund (ETF) in the United States in January has introduced unique dynamics to the supply landscape. Sustained buying pressure has resulted in unprecedented phenomena, including record highs preceding the halving of collective subsidies.
Timothy Peterson, founder and investment manager at Cane Island Alternative Advisors, analyzed the current trend and suggested that ETF demand could propel Bitcoin to six figures as early as 2024. "The approval of a Bitcoin spot ETF appears to have triggered an accumulation phase that, if maintained, could propel the price of Bitcoin to $100,000 by October 2024," he shared with subscribers on March 7. An accompanying chart illustrates the comparison between the number of Unspent Transaction Outputs (UTXO) and BTC price performance, demonstrating a daily growth rate of 0.34%.
