While the cryptocurrency has declined from $12,400 to $10,000 in the past three weeks, the number of "accumulation addresses" has increased by 2% to 513,000, according to data source Glassnode.
"Lots of new daily buyers are coming in to absorb supply," Su Zhu, CEO of Singapore-based Three Arrows Capital, told CoinDesk in a Telegram chat.
Accumulation addresses are those that have at least two incoming non-dust transfers (representing minuscule amounts of bitcoin) and have never spent funds.
The metric excludes addresses belonging to miners and exchanges, and addresses active more than seven years ago to exclude lost coins.
The divergence between prices and accumulation addresses suggests that investors view the recent price drop as a typical bull market pullback and expect prices to rise once more.
"Markets typically retrace one third or more in a bull market after local euphoria," Zhu tweeted on Friday, suggesting prices could drop to as low as $8,800 and still be a "healthy target."
Bitcoin daily chart Source: TradingView
Bitcoin fell by over 10% on Thursday, confirming a head-and-shoulders breakdown – a bearish reversal pattern – and a violation of the six-month-long bull market trendline.
Usually, such patterns invite more substantial chart-driven selling, yielding deeper price declines.
So far, bitcoin has managed to defend the $10,000 support – possibly a sign of an underlying bullish tone in the market.
"I am flabbergasted by the strength shown at $10,000, and it probably means $100,000 is more likely than $5,000 at this stage," Zhu said in another tweet.
At press time, bitcoin is changing hands near $10,117, representing a 1.59% decline on the day.
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