Recent on-chain data for Bitcoin indicates significant activity among “accumulation addresses,” which continue to acquire substantial amounts of the cryptocurrency.
Bitcoin Accumulation Addresses Witnessing Inflows
Analyst Ali highlights in a recent post on X that Bitcoin accumulation addresses have been experiencing notable inflows lately. These addresses typically belong to long-term holders of the cryptocurrency.
There are specific criteria for an address to be categorized as an accumulation address. Notably, such addresses should not have recorded any outgoing transfers. This indicates that accumulation addresses have only received incoming transfers, never engaging in selling transactions.
Additionally, an address qualifies as an accumulation address once it has received at least two inflow transactions and holds more than 10 BTC in its balance.
It’s important to note that exchange and miner-associated wallets are not included in this category, as their holdings typically represent the sell-side of the market. The supply held by accumulation addresses is considered to be firmly in the hands of long-term holders, reducing the available supply when these investors make further purchases.
Furthermore, addresses that have not received any inflows for more than seven years are excluded from this group, as they are often presumed lost or inactive.
21,400 $BTC, worth around $1.40 billion, were moved to accumulation addresses! pic.twitter.com/oYhMj481g8
— Ali (@ali_charts) April 4, 2024
Ali shared a CryptoQuant chart depicting the trend of Bitcoin inflows into accumulation addresses since the beginning of the year. The chart illustrates significant inflows to these addresses throughout the month, indicating continuous buying activity by these investors.
The metric peaked at 21,400 BTC on the first day of the month, equivalent to over $1.4 billion at the current exchange rate. This amount is noteworthy and approaches the all-time high of 25,300 BTC achieved just a month and a half ago.
Market Impact and Price Movement
The ongoing buying activity among accumulation addresses is viewed as a positive signal for Bitcoin. Correspondingly, Bitcoin’s price has shown signs of stability and recovery, with a recent increase of over 3%, pushing it above the $68,100 level.
In summary, the sustained accumulation of Bitcoin by long-term holders suggests confidence in the cryptocurrency’s future prospects and may contribute to its price resilience in the market.
