Bitcoin Mega Whales Return To Selling Mode, More Downside Soon?

On-chain data shows the largest of the Bitcoin whales have returned to distribution, a sign that could be bearish for the asset’s price.

As explained by analyst James V. Straten in a new post on X, the BTC whales, who had earlier been in a phase of accumulation, have switched their behavior to that of distribution now.

The relevant indicator here is the “Trend Accumulation Score” from Glassnode, which keeps track of whether Bitcoin investors have been buying or selling during the past month. This metric finds this value by looking at the balance changes in the addresses of the holders.

The score also puts a higher weightage on the larger entities, meaning that the accumulation of a few large holders would be more significant for the indicator than the behavior of the smaller hands.

When the Trend Accumulation Score has a value close to 1, it means that there is a trend of net accumulation in the market right now. On the other hand, values close to zero imply distribution is the dominant behavior currently.

Now, here is how this score has changed for the various Bitcoin investor cohorts since the start of the year:

As you can see above, the entire Bitcoin market had been displaying a net distribution behavior during August as the accumulation trend score had been a shade of red for all the cohorts (with the deeper shades naturally being closer to the zero mark). During this selloff period, BTC had registered a significant drawdown.

At the start of September, most of the investor groups had still continued to sell, but interestingly, the largest cohort in the sector, the holders carrying more than 10,000 BTC ($262.7 million at the current exchange rate) had started accumulating instead.

This group may be called the “mega whales,” since these investors stand out even among the whales. From the data, it’s visible that while these mega whales had been buying earlier in the month, they have recently again shown a shift in their behavior.

The Trend Accumulation Score has declined for these humongous entities and now it’s leaning toward distribution. This may suggest that while these investors had thought the earlier lows presented ideal entry opportunities, the fact that the coin has only continued to stagnate recently may have changed their minds.

At present, though, the mega whales aren’t dumping Bitcoin at too large a scale. The same is not true for the rest of the cohorts, however, who have taken to some pretty heavy selling recently, as the Trend Accumulation Score has turned deep red for them.

This market-wide selling could be a troubling sign for the cryptocurrency and may be a foreshadowing of a drawdown in the near future.

Bitcoin has been showing a trend of overall consolidation since the crash back in August, as the cryptocurrency continues to float around the $26,200 mark.