While the Bitcoin market has been struggling through a difficult phase, recent on-chain data suggest signs of fresh accumulation of the cryptocurrency.
The new accumulation over the past month can be noticed by studying the figures revealed by CryptoQuant, a data company that provides the most comprehensive on-chain and market data gathered from blockchain and significant cryptocurrency exchanges.
Analysts have studied the data based on Unspent Transaction Output (UTXOs) purchases between one week and one month ago have risen following the alleged collapse of FTX. An unspent transaction output (UTXO) in cryptocurrencies represents some digital currency authorized by one account to be spent by another.
In this case, the relevant indicator is the “realized cap- UTXO age bands,” which signifies the percentage of Bitcoin realized cap that a particular age group holds.
The realized cap here indicates a type of Bitcoin capitalization structure wherein the crypto’s cap is measured by weighing each coin in the circulation supply against the previous prices it moved and then taking the sum for the entire supply.
This particular capitalization system differs from the general market cap, in which all the coins are multiplied by the current Bitcoin price to obtain the result. The “age bands,” as specified, are groups that define the period under which the UTXOs falling into it were last moved, i.e., the 1m-3m age band includes all UTXOs that haven’t shown movement between one and three months ago.
The chart below shows the realized cap contribution of the “1w-1m” band.
The graph shows that the realized cap of the Bitcoin UTXOs falling into the group declined during the bear phase and reached shallow values by the time FTX collapse news flared. However, following the crash, there was a surge signifying that many coins were purchased between one week and one month ago.
Hence, investors have instilled trust in Bitcoin and are busy accumulating it at its lows, contrary to the prevalent despair in the industry triggered by the collapse of companies.
Earlier this month, a BIS report also revealed that smaller investors purchased in times of rising prices. In contrast, the larger holders (popularly known as whales) sold, as reported by Todayq News.
At the time of writing, Bitcoin is trading at $16,577.60, a 0.40% surge over the past day and about a 20.21% decline over the past month.