On-chain data shows that long-term Bitcoin holders have stepped up their sales as the binary CDD metric has spiked.
Bitcoin Binary Coin Days Destroyed Observed a Surge
As a CryptoQuant analyst pointed out Positionlong-term holders may be using the recent surge as an opportunity to distribute their coins.
A “coin day” is said to be the amount of 1 BTC accumulated while sitting still for a day. Therefore, the total number of days a coin has been on the market refers to the total time that the supply of Bitcoin is dormant.
Every time a coin moves on the chain, the coin days associated with it reset back to zero. “coindays destruction” is a metric that accurately measures this for the entire market on any given day.
Whenever the value of this metric spikes, it means there is a large amount of dormant supply. long term holder Or “Hodler” has just been sold or moved.
One way to interpret the data associated with this metric is to use the “Binary CDD” metric. Here’s a chart showing trends over the past year:
Looks like the value of this metric has spiked up in recent days | Source: CryptoQuant
What Binary CDD tells us is whether long-term Bitcoin holders are currently making more moves than average.
If the indicator value moves towards 1, it means that LTH may be exerting selling pressure on the market right now. On the other hand, if the value points to 0, it means that LTH is not moving that many coins at the moment.
As you can see from the graph above, crypto prices generally observed sharp declines whenever the binary CDD metric observed an increase in value over the past year.
Recently, while the price of Bitcoin has also been on an upward trend, the value of the indicator is rising again.
This could suggest that LTH is using this price spike as an opportunity to sell some of its coins for a profit.
Regardless of past trends, this spike in binary CDD could prove bearish for Bitcoin’s value.
At the time of writing, Bitcoin price At around $21.7k, it has risen 9% over the past week. Last month, the value of the cryptocurrency he fell 9%.
The chart below shows the trend of BTC price over the last 5 days.
The value of the crypto seems to have observed upwards momentum during the last few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com