BTC drops below $30k, but accumulation underway

20 Jul 2021

Although Bitcoin has fallen under the $30,000 mark for the first time in a month, whales may be gradually accumulating BTC according to on-chain metrics.

As per Glassnode’s “The Week On-Chain” report, Bitcoin reserves on centralised exchanges have continued to reduce, despite the recent bearish momentum. An average of 36,000 Bitcoin is being withdrawn each month from exchanges, says a Cointelegraph report.

Glassnode says that declining Bitcoin reserves on exchanges suggests large investors are transferring BTC into secure storage, as opposed to leaving coins on exchanges ready for selling.

Moreover, Glassnode also recognised a recent rise in the number of entities – defined as a “unique on-chain cluster of associated addresses” says Cointelegraph - hodling Bitcoin from May onwards, rising from around 250,000 to close to 300,000 on Tuesday.

The analytics provider added that the number of “sending entities” – address clusters linked to selling - has dropped by approximately a third from 150,000 to 100,000, while “receiving entities” – those addresses associated with accumulation or holding — have risen by around 20% from 190,000 to 250,000 over the same time.

Despite signs indicating accumulation, Glassnode acknowledged heavily split market sentiment, forecasting extreme volatility could be around the corner for the markets: “We have an extremely divided market, and one with a likely expansion of volatility just around the corner.”

Glassnode went on to add that miners are currently accumulating, despite the costs due to the migration following the Bitcoin mining crackdown in China. 

According to the miner net position change metric, over 3,300 Bitcoin is being accumulated every month.