- On-chain data shows the Bitcoin Coin Days Destroyed (CDD) has reached a new all-time high (ATH).
- This spike in CDD is larger than the one observed in November 2018.
- “The latest spike in CDD indicates significant movements from long-term holders,” says Maartunn, CryptoQuant community manager.
Discover the implications of the recent Bitcoin Coin Days Destroyed (CDD) spike and its potential impact on the market.
Bitcoin CDD Has Just Observed A Spike Larger Than November 2018
The Bitcoin Coin Days Destroyed (CDD) metric has recently witnessed a significant spike, surpassing the levels seen during the November 2018 crash. The CDD is an on-chain indicator that measures the number of coin days destroyed when dormant coins are moved. A coin day is accumulated when 1 BTC remains dormant for one day. When these coins are eventually moved, their coin days are reset to zero, and the accumulated coin days are considered destroyed.
Movements from Long-Term Holders
Generally, spikes in the CDD metric are associated with movements from long-term holders (LTHs). These investors tend to hold onto their tokens for extended periods, accumulating a large number of coin days. When LTHs finally make transactions, the accumulated coin days are destroyed, causing the CDD metric to spike. Such movements often indicate that these holders are participating in a selloff.
Mt. Gox Transactions
Upon closer inspection, it appears that the recent spike in CDD can be attributed to transactions related to the Mt. Gox cryptocurrency exchange. The bankrupt exchange had previously announced plans to repay creditors, and the latest transfers are likely connected to this repayment process. The Bitcoin held by Mt. Gox had been dormant for a considerable period, amassing a significant number of coin days. The movement of these coins has resulted in a record-high number of coin days being destroyed within a short timeframe.
BTC Price
At the time of writing, Bitcoin is trading at around $67,500, reflecting a 4% decline over the past week. The recent spike in CDD and the associated movements from long-term holders may have contributed to this price decline.
Conclusion
The recent spike in Bitcoin Coin Days Destroyed (CDD) highlights significant movements from long-term holders, potentially indicating a selloff. The transactions related to the Mt. Gox exchange have played a crucial role in this spike. As Bitcoin’s price continues to fluctuate, market participants should closely monitor on-chain metrics like CDD to gain insights into investor behavior and potential market trends.
