Is Bitcoin Ready To Bounce Again? The Biggest Funding Trend to Watch Out for
Bitcoin (BTC) may be set for another significant upward move as on-chain data suggests strong accumulation activity among long-term owners. The author of CryptoQuant, Darkfost on X, highlighted the significant increase in the demand for accumulator addresses that always receive and store Bitcoin. According to him, the current behavior of these investors can have an impact market sentiment and trigger a price increase in Bitcoin.
Bitcoin Accumulation Activity Suggests High Future
CryptoQuant chart analysis for Darkfost exhibitions that the monthly collection from “accumulator addresses” now amounts to 372,000 BTC, a sharp increase from 10,000 BTC per month in September 2024. This large increase in long-term purchases shows the opposite strategic position of late. short-term trading behavior in the market.
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His chart also shows that the demand for accumulator addresses was growing slowly every year. According to the analyst, Bitcoin’s recent price drop appears to have created the possibility for these long-term investors to continue buying aggressively. Instead of reacting to ongoing price fluctuations, they seem to focus on Bitcoin’s future growth and stand ahead of any potential jump.
Notably, Darkfrost has shown that the level of recent hoarding has never been seen before, suggesting that a large portion of Bitcoin has been permanently removed from circulation. As demand continues to increase and supply decreases, this can create favorable conditions for price increases.
The recent trend of accumulation also highlights the big difference between short-term trading and deliberate stops. Accumulator addresses tend to reflect a disciplined, patient approach to investing, consistent with the history and periods of strong market performance. Their aggressive buying may act as a stabilizing factor in the market and provide early indications of possible price reversals.
The same principle applies to periods with visible signs sales and weak demand. If investor sentiment is low, especially in highly volatile situations, it can contribute to more pronounced declines.
How Accumulator Addresses Are Identified
Darkfost notes that CryptoQuant identifies accumulator addresses using a detailed set of criteria. According to him, these addresses show that there is none it comes out and you must have bought a small amount of BTC from their latest transaction. Each address must have at least two separate purchase or income events, hold a minimum Bitcoin balance, and have been active at least once in the last seven years.
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To ensure accuracy, CryptoQuant also excludes well-known exchanges addresses of minersand any addresses that interact with smart contracts. This frame helps reduce distortion and provide a clear image long term owners actively accumulating Bitcoin.
Darkfost emphasized that the identification and selection process is accurate and complete, allowing confidence in the validity of observed overlaps. Although CryptoQuant takes extensive measures to be accurate, the report acknowledges that the selection is not complete and cannot capture the entire organization, such as centralized exchanges or miners.
Featured image from Getty Images, chart from Tradingview.com
