Bitcoin Accumulation Trends Strengthen as Realized Losses Exceed $5.7 Billion

Bitcoin has seen a 10% decline over the last month, prompting various wallet holders to shift from distributing to accumulating their assets. Recent data shows that this trend of accumulation, alongside a significant amount of realized losses, may indicate a change in market momentum.

Key Takeaways:

Increased Accumulation: Bitcoin whales and mid-sized holders are actively increasing their BTC holdings at the current prices.
High Absorption Rates: These large holders have absorbed nearly 240% of the new Bitcoin supply being mined.
Significant Losses: On November 22, Bitcoin's realized losses hit $5.7 billion, marking the largest loss recorded since the FTX incident, a traditional signal of capitulation.

Bitcoin accumulation trends strengthen as realized losses surpass $5.7B

Strong Accumulation Among Bitcoin Holders

As Bitcoin recently dipped to $80,000, major holders (whales) capitalized on this opportunity to increase their investments. According to data from Glassnode, the Bitcoin Accumulation Trend Score (ATS) is approaching 1, suggesting strong accumulation activity among significant investors.

An ATS nearing 1 (represented in dark blue) indicates that these whales are adding more Bitcoin to their holdings rather than distributing it. Conversely, a score closer to 0 (highlighted in light yellow) suggests they are not accumulating or are in distribution mode. The recent spike in this score signifies a shift from distribution to accumulation across various groups of investors, echoing a similar pattern seen in July. This earlier accumulation foreshadowed Bitcoin's rally to a previous all-time high of $124,500, achieved on August 14, after trading below $100,000 in June.

Bitcoin accumulation trend score. Source: Glassnode

Moreover, Glassnode has noted a resurgence in purchasing activity from small to mid-sized holders possessing between 10 and 1,000 BTC, with these groups accumulating significantly in recent weeks.

Bitcoin accumulation trend score by cohort. Source: Glassnode

Whales Absorbing Nearly 240% of New BTC Supply

Supporting this accumulation trend is the yearly absorption rate metric, which illustrates that Bitcoin whales and sharks are absorbing about 240% of the annual BTC issuance. Simultaneously, exchanges have been losing Bitcoin at an unprecedented pace.

The yearly absorption rate for exchanges has dropped below -130%, indicating that a growing number of investors are steering towards self-custody or planning long-term investments.

Bitcoin yearly absorption rates. Source: Glassnode

Furthermore, larger holders with 100 or more BTC are acquiring nearly one and a half times the new Bitcoin issuance, marking the fastest accumulation rate among these investors in the history of Bitcoin.

Bitcoin yearly absorption rates of whales and sharks. Source: Glassnode

This trend signifies a fundamental change as more traditional financial entities incorporate BTC into their portfolios, particularly with the emergence of Bitcoin treasury firms and increased demand for ETFs.

Bitcoin Realized Losses Exceed $5.7 Billion

Adding to these developments, Glassnode's data reveals that Bitcoin’s recent dip resulted in the largest increase in realized losses since the collapse of FTX in late 2022.

The accompanying chart shows that realized losses from short-term holders (STHs) reached $3 billion on November 22, while long-term holders (LTHs) experienced losses of $1.78 billion. The total realized losses across all holders surpassed $5.78 billion following Bitcoin's decline to $80,000 on November 21.

Bitcoin realized losses by LTHs and STHs. Source: Glassnode

As reported by Cointelegraph, short-term Bitcoin traders appear to be under the most pressure amid the current downturn, while ETFs have only accounted for a maximum of 3% of the recent selling activity.