Acc vs Distribution
Acc vs Distribution by all Cohorts

Acc vs Distribution by all Cohorts

The "Acc vs Distribution by all Cohorts" indicator provides a detailed analysis of Bitcoin holders' behavior in terms of accumulation and distribution, considering different groups (or ranges) of addresses holding varied amounts of Bitcoin. Let's explore the logic and functioning of this indicator in a didactic way:

  1. Various Address Ranges (Cohorts):

    • Unlike indicators that focus only on large Bitcoin holders, this indicator analyzes several "ranges" or "groups" of addresses. Each group represents addresses holding different amounts of Bitcoin, from small holders (e.g., those with less than 1 BTC) to large investors (e.g., those with thousands of BTC).
  2. Accumulation and Distribution:

    • Accumulation: Refers to buying and holding Bitcoin. An increase in accumulation indicates that holders in a certain range are increasing their Bitcoin reserves, which can be a sign of confidence in the market or expectation of an increase in value.
    • Distribution: Refers to selling Bitcoin. An increase in distribution can indicate that holders are selling their cryptocurrencies, which might be a sign of lack of confidence in the market or a need for liquidity.
  3. Comparative Analysis Among Groups:

    • This indicator allows for comparing the behavior of accumulation and distribution among different groups of holders. For example, one can observe whether small holders are accumulating Bitcoin while large holders are distributing, or vice versa. This comparison is important to understand the dynamics of the market as a whole.
  4. Market Trends:

    • Analyzing accumulation and distribution trends across different ranges, it's possible to identify general patterns in the market. For instance, if most groups are accumulating, it might indicate a bullish trend in the market. Conversely, a predominant trend of distribution could signal a potential downturn.
  5. Holistic View:

    • This indicator offers a more holistic and comprehensive view of the Bitcoin market. Instead of focusing solely on large holders, it encompasses a wider range of participants, which can provide more representative insights into the overall state of the market.
  6. Investment Decisions:

    • For investors and analysts, understanding these trends can aid in making investment decisions. For example, an increase in accumulation by small holders might be an early indicator of an upward movement in the market.

In summary, the "Acc vs Distribution by all Cohorts" indicator is a valuable tool for understanding the different dynamics of Bitcoin accumulation and distribution among various holder ranges. It provides a diversified analysis covering everyone from small investors to the largest holders, helping to identify market trends and aiding in informed decision-making.