- Bitcoin’s long-term holders have recently slowed down their profit-taking, following a significant selloff.
- The Coin Days Destroyed (CDD) metric, which tracks the movement of aged coins, has seen a decline.
- This suggests a decrease in selling pressure from long-term holders, potentially paving the way for a Bitcoin rally.
Bitcoin’s long-term holders have cooled off their profit-taking, leading to a decline in the Coin Days Destroyed metric. This could indicate a decrease in selling pressure and potentially pave the way for a Bitcoin rally.
Understanding Coin Days Destroyed
A “coin day” is a quantity that 1 BTC accumulates after staying dormant on the blockchain for 1 day. When a coin is finally moved on the network, its coin days count resets back to zero, and the coin days that it had been holding are said to be “destroyed.” The Coin Days Destroyed (CDD) keeps track of the total amount of coin days being destroyed in this manner across the blockchain on any given day.
Long-Term Holders and the CDD
Spikes in the CDD are often attributed to the “long-term holders,” investors who normally tend to HODL onto their coins for extended periods. Large moves from these investors are not that common, as they are by nature HODLers who remain tight despite whatever may be going on in the wider market. When the LTHs do break their dormancy, it’s generally for selling, so spikes in the CDD may correspond to selling pressure arising from this group.
Recent Trends in Bitcoin’s CDD
The Bitcoin CDD In Profit had risen to some very high levels earlier as the BTC rally towards the new all-time high had taken place. This extraordinary spike would suggest that the run had enticed even these diamond hands into harvesting their profits. As the asset’s drawdown post this rally has played out, though, the metric’s value has declined, suggesting a decrease in selling pressure from the LTHs.
Bitcoin Price Development
Bitcoin’s recovery surge has slowed down over the last few days as the asset’s price has continued to consolidate around the $64,000 level. It now remains to be seen how the Bitcoin price develops from here, as perhaps one of the main obstacles to the rally is now out of the asset’s way.
Conclusion
With the decrease in selling pressure from long-term holders, as indicated by the decline in the Coin Days Destroyed metric, Bitcoin may be poised for a rally. The future price development of Bitcoin will be interesting to watch in light of these recent trends.
