recent On-chain data That Bitcoin may be entering two separate important phases in the current market cycle, which could help determine the next trajectory of crypto asset prices in the coming weeks. was shown.
Stages of Bitcoin accumulation and distribution are identified
Bitcoin capital flows on the blockchain reveal areas of accumulation and distribution, providing insight into investor behavior. reported Alpharactal, an advanced investment data platform, said this in a recent post on the X (formerly Twitter) platform.
It is worth noting that during the accumulation phase, whales and long-term investors tend to increase their Bitcoin holdings. This is characterized by high activity and an expression of confidence in future asset price increases. Meanwhile, in the distribution stage, these holders sell some of their holdings, most of which lead to market corrections and stock price increases. market volatility.
The platform created its predictions after studying Bitcoin's on-chain CapFlow Sentiment Index indicator. This key indicator uses a combination of momentum and stochastic indicators, along with a number of on-chain oscillators, to evaluate the realized capitalization of BTC.
According to the platform, this indicator is reliable in pinpointing areas in the network where coin flow begins to slow down and lose momentum, reflecting smart hand distribution. Alfaractal argues that this particular development also occurs during an accumulation phase that corresponds to a local bottom.
Additionally, the platform will, after the 2024 distribution period, Bitcoin It has not yet reached its all-time high. However, something similar to what happened in 2017, where three phases were mentioned, could happen again.
As a result, Alpharactal is constantly focused on metrics and new demand It is developing as an adverse development could signal a decline in the indicator and cause a decline in the BTC price.
Will BTC regain its lost momentum?
With some positive advances, Bitcoin on-chain activity and indicators, the crypto asset could regain its previous upward momentum, with BTC surging from $59,000 levels to nearly $70,000 in the last week.
BTC It rose to about $68,693 late Thursday. However, as of today, the crypto asset has fallen below $67,500. While this move may have caused some concern, Bitcoin has shown resilience and remains firm at the $67,300 support level.
This temporary decline could be due to the absence of bulls, as identified by the decline in trading volume, which has declined by more than 11% over the past day. If the bulls regain control of the market, BTC could accumulate enough strength for a price recovery, and one of the next key areas to watch is the $70,000 level.
Featured image from Unsplash, chart from Tradingview.com
