Trading accumulation trend scores

Evaluating the predictive power of Glassnode's and Ecoinometrics's accumulation metrics.

Author’s Note:

This article has a pretty niche audience and won’t be for everyone. It demonstrates a simple method for backtesting popular bitcoin accumulation metrics, and then describes the methodology to create a trading strategy from the data + analyzes the relative returns of an example strategy compared to a pure bitcoin long position.

Estimated reading time: 10 minutes

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Accumulation Trend Scores

Glassnode, one of the most popular bitcoin data providers, released a new metric: accumulation trend scores. The community’s reaction to the metric has been mixed, and the figure below demonstrates why: if we associate heavy accumulation with buying pressure then we should expect similar price performance with similar accumulation regimes.