The Bitcoin price action has been muted over the past few days, trading within the $90,000 and $88,000 levels. Classically, consolidation periods often precede major moves either to the upside or downside of the market.
Accumulation Demand Metric Surges To All-Time-HighThe Accumulator Address Demand metric monitors the net buying pressure coming from addresses that buy Bitcoin consistently, and without any significant selling. This behavior (of buying and rarely selling) is typical of the large-scale Bitcoin holders, commonly known as the whales.
Notably, CoinNiel also pointed out that when major withdrawals from exchanges occur, they are rarely ever incited by retailers, but by whales. As such, when the Bitcoin whales withdraw their holdings from exchanges, their buying pressure translates into an increase in the Accumulator Address Demand.
From the chart above, the indicator has reached an all-time high level. According to the crypto pundit, this could be a sign that the whales are currently experiencing, on intense levels, the “fear of missing out.”
When this ratio rises sharply, it is usually a sign that demand is absorbing newly created supply. From the data shared by the analyst, the Liquidity Inventory Ratio has also reached an extreme value of 3.8.
However, this extreme reading is only a reflection of what is happening on US exchanges. Hence, CoinNiel implied that, for the first time in years, US exchanges are recording exceptionally high demand relative to the coins available.
In theory, a 3.8 reading implies the imminence of a supply shock in the scenario where current conditions prevail. But, the analyst highlighted that it may not necessarily happen, as a 3.8 reading is more a sign of intensified whale demand than a surefire means to predict supply shocks.
Bitcoin Price At A GlanceAs of this writing, Bitcoin is valued at $88,520, reflecting an over 1% decline in the past 24 hours.
