Changing Dynamics in Bitcoin, How Will it Affect BTC Price?

• In recent times, the activity of Bitcoin on the chain has visibly changed and deviated from the previous accumulation trend.
• Previously, COINOTAG had reported that whales were accumulating large amounts of Bitcoin. This action helped BTC to surpass $30,000 at one point.
• Despite heavy selling pressure, Santiment announced that the funding rate on Binance is 0.01%. A positive funding rate indicates that long position traders are dominant.

The current metrics in Bitcoin indicate a change in dynamics, but bullish sentiments still prevail for BTC.

Some Metrics in Bitcoin Show a Change in Dynamics

Recently, the activity of Bitcoin on the chain has visibly changed and deviated from the previous accumulation trend. The balance between accumulation and distribution is important to understand market sentiment for BTC’s price movement. One of the metrics that explains this issue is the accumulation trend score.

Analysis of this metric shows a transition towards a more widespread distribution of Bitcoin. As a market behavior indicator, the accumulation trend score reflects the number of new coins accumulated or sold during a specific period.

When the accumulation trend score is close to one, it means that large assets are accumulating. However, when the metric approaches zero, it indicates a shift towards selling. At the time of writing, Bitcoin’s accumulation trend score was 0.05, indicating that the sentiment of large holders is towards selling.

Previously, COINOTAG had reported that whales were accumulating large amounts of Bitcoin. This action helped BTC to surpass $30,000 at one point. Therefore, the change in sentiment may have affected BTC’s recent consolidation that it needs to deal with.

If this metric continues to remain the same, BTC’s consolidation or decline may continue. Furthermore, a CryptoQuant analyst noted that BTC’s inability to climb on August 12th could be associated with net taker volume.

Net taker volume measures the difference between the buying and selling volume of Bitcoin futures contracts. The analyst examined the metric based on historical usage and referred to 2021, saying:

“In May 2021, Bitcoin was trading around $60,000, but the Taker Sell Volume was $600 million higher than the Taker Buy Volume. This indicates heavy selling through market orders even when the price is still high.”

Therefore, when the net taker volume is in deep positive values and the price is relatively low, aggressive buying takes place. However, Bitcoin’s situation was different. According to the shared graph, the net taker volume was negative, indicating intense selling pressure.

The excitement continues

Despite heavy selling pressure, Santiment announced that the funding rate on Binance is 0.01%. A positive funding rate indicates that long position traders are dominant and willing to pay funding fees to short position traders.

On the contrary, a negative funding rate indicates that short traders pay funding fees to longs to keep their positions open. Therefore, the current status of the metric indicates bullish market sentiment.

However, traders should be cautious about ongoing accumulation and distribution. If Bitcoin’s distribution continues to outweigh accumulation, it may only be a matter of time before some long position holders liquidate rapidly. This could happen if the BTC price sharply declines.