Bitcoin Accumulation Phase Intensifies as Investors Buy Dips

Bitcoin (BTC) is currently experiencing a significant accumulation phase, according to data from the market intelligence firm Glassnode. The firm's analysis indicates that investor activity on both Coinbase, the top US crypto exchange, and Binance, the world’s top exchange, shows a growing demand for Bitcoin. Off-chain spot flows have turned positive, with Coinbase seeing intense net buying pressure and Binance experiencing a cool-down in sell-side pressure. This behavior suggests that investors are actively buying Bitcoin during market dips, a strategy known as 'buy-the-dip'.

The cumulative volume delta (CVD), an indicator that compares buying and selling volume over a given time period, has been strengthening on both exchanges. Since mid-April, Coinbase has seen consistent net buying, with CVD peaking at +$45 million per day, aligning with the market's upward trend. In contrast, Binance markets have transitioned from intense net selling pressure to a milder sell-side pressure, reflecting a notable cool-down.

Glassnode has identified a key support range between $93,000 and $95,000 based on buying trends in the past 30 days. This zone is likely to act as a strong support level in the event of any short-term market pullback, representing a demand zone where investors are likely to see value once again.

One metric that may determine if the market remains bullish is the Short-Term Holder (STH) Supply in Profit/Loss Ratio. This ratio tracks the average price at which investors who have held their BTC for less than 155 days acquired their coins. Currently, the ratio sits at above 9, meaning more than 90% of STH supply is in profit. As long as this ratio remains well above the equilibrium level of 1.0, bullish momentum tends to stay intact. However, any sustained drop below this level would signal a meaningful shift in market strength and possible trend exhaustion.

The derivatives markets, however, appear to be playing catch-up, with open interest and funding rates yet to fully align with the upwards momentum in spot markets. Options market positioning reflects a cautious but optimistic outlook, whilst there are few signs of excessive long leverage in futures markets at this time.

Bitcoin is trading for $104,191 at the time of writing, up 1% on the day. The current market dynamics suggest a strong accumulation phase for Bitcoin, with investors actively buying during dips and a key support range identified between $93,000 and $95,000. The bullish momentum is likely to remain intact as long as the STH Supply in Profit/Loss Ratio stays above the equilibrium level. However, any sustained drop below this level could signal a shift in market strength.