Investors accumulate more bitcoin and strengthen its price structure

Key Facts


  • When bitcoin surpassed USD 50,000 in February, there was weakness in the market.

  • This time, from minnows to whales are accumulating.

Through the bitcoin accumulation trend Participation Score indicator, a study by analytics firm Ecoinometrics explains how the bitcoin market has strengthened since the price first broke through the USD 50,000 barrier in February this year.

It does this by comparing the accumulation trends of five cohorts of holders and establishes a clear difference between the accumulation patterns then and now.

Ecoinometrics uses in that analysis

the Participation Score metric in the bitcoin accumulation trend. This indicator takes groups of addresses, from little fish (addresses with less than 1 BTC), to whales (addresses with between 1,000 BTC and 10,000 BTC), and looks at whether, on average, they have been accumulating or not in the last 30 days.

From blue to red: more cohorts of holders accumulate bitcoin

The study uses a chromatic scale to identify, on the price curve, the categories of holders who accumulate bitcoin. A low value participation score (blue in the graph below) is interpreted as meaning that, on average, over the past 30 days most small groups of holders have been accumulating, Ecoinometrics notes.

On the other hand, a high participation score (red in the graph) means that almost all groups of addresses, from small fish to whales, are accumulating, the study says.

While the mere detection of addresses hoarding bitcoins does not immediately predict the price, the fact that most people are hoarding is perceived as a bullish sign, according to the study. This perception is based on both the resulting shortage of supply and general market sentiment, the report says.

With these assumptions, the following chart shows the evolution of the participation score from the beginning of the year, to the present day.

Investors accumulate more bitcoin and strengthen its price structure Investors accumulate more bitcoin and strengthen its price structure At the recent crossing of the USD 50,000 mark, there are more holders accumulating. Source: Ecoinometrics.

The study highlights that when bitcoin first crossed $50,000, the participation score had already started to weaken.

This is inferred because the curve becomes increasingly blue once the crossover occurs in mid-February. This implies that progressively fewer categories of holders were accumulating. In the subsequent crossover, in March, according to the chart, only holders with less than 1 BTC were accumulating (deeper blue).

In this context of a weakening market.

So, despite the rising price, any negative events, or those associated with fear, uncertainty and doubt (FUD), were likely to result in negative price action, the report states.

“Again, we are not saying that this blue zone predicts that the price will go down. But it does hint at some weakness in the market,” the report notes. Ecoinometrics notes that this is not the first time bitcoin has crossed that barrier, having done so in February and March of this year.

However, it

reiterates that the market conditions are different today:

This time we are crossing above USD 50,000 again with the participation score rising and already in the orange zone! So yes, this time it is different. We are heading back towards the all-time high with positive on-chain momentum.

Ecoinometrics. In view of

the fact that the participation score provides a high-level averaged view, according to the study, the authors present another graph broken down by cohort of holders.

Investors accumulate more bitcoin and strengthen its price structure Investors accumulate more bitcoin and strengthen its price structure Accumulation pattern of five categories of holders, April 2021 to present.

BTC accumulation by holder cohort

From the analysis of each category of holder, at the top of the graph, we can deduce whether they are shedding their BTC (trending blue) or accumulating (trending red), according to the chromatic scale shown


In the past two weeks, a contrast is emerging, the study says. “On the one hand, addresses controlling less than 10 BTC are steadily piling up satoshis,” the authors highlight. That’s evidenced by the intense yellow in those cohorts, over the aforementioned period.

“Addresses controlling 10 to 1k BTC have become more neutral,” the study says, as those two categories are shown with larger areas in blue. Whales, meanwhile, have been accumulating more slowly, as red shows a gradient toward yellow, the authors say.

So, to put it another way, we are not in a situation where only the small fish are accumulating and everyone else is unloading their coins. This is different from what bitcoin experienced earlier this year. This time the market is clearly in a healthier state.


In summary, from the accumulation patterns of the different segments in the chart above, it can be inferred that the bitcoin market appears more robust than it did at the beginning of the year.

The study states that there remains a question mark over the price development going forward. “The real challenge now is to gain enough momentum for bitcoin to move into the six-figure range in the coming months. For that to happen, we probably don’t want to see a big divergence in the accumulation trend between small fish and whales,” the report said by way of conclusion.

<img src=”//’%20viewBox=’0%200%20214%20241’%3E%3C/svg%3E” alt=” width=”-214″ height=”-241″ /> Investors accumulate more bitcoin and strengthen its price structure Accumulation trends versus price evolution. Source: Ecoinometrics.

This graph shows the percentage changes of BTC held in the hands of whiting holders (less than 1 BTC), and holders with between 100 BTC and 1,000 BTC. The price of BTC is shown by the color of the dots on the curve, from white for USD 10,000, before the November spike, to dark blue for USD 65,000 in mid-April.

In a recent analysis by Willy Woo, published Monday by CryptoNews, the analyst points out that long-term bitcoin investors have entered a selling phase and that a larger than normal flow of incoming BTC has been noted on exchanges. This provides downward pressure on prices, Woo says.