Dumping of Bitcoin long-term holder may have been behind Revisit under $19k
On-chain data shows that selling by long-term Bitcoin holders may have been behind the cryptocurrency’s recent decline below $19k.
Bitcoin Exchange Inflow CDD has recently observed a sharp increase
As pointed out by an analyst in a CryptoQuant post, there has been some possible selling pressure from long-term holders recently.
The relevant indicator here is Bitcoin “Coin Days Destroyed” (CDD). A coin day is defined as the amount accumulated by exactly 1 BTC when you have been inactive for 1 full day. The total number of coin days in the market therefore represents the sum of the time each coin in the supply has been dormant.
When these previously stationary coins show some movement, the coin days they have been given are said to be “ruined” as they reset to zero. The total number of these is exactly what the CDD metric measures.
Now, since long-term owners hold their coins for long periods of time, they naturally accumulate significantly higher coin days than the rest of the market. As such, peaks in CDD may be indicative of activity from this cohort.
Here is a chart showing the trend in Bitcoin CDD, not for the entire network, but specifically for transactions to exchanges:
Looks like the 14-day moving average value of the metric has been quite high in recent days | Source: CryptoQuant
As you can see in the graph above, Bitcoin exchange inflow CDD saw a peak in its 14-day MA value recently. This suggests that long-term owners have made some large deposits to exchanges in the past week.
In the past, such increases in the CDD exchange have usually been bearish for the price of crypto, as these investors usually deposit into exchanges for dumping purposes.
This time too, shortly after the indicator’s values were raised, BTC observed a fall from a local high of around $22.5k.
However, after this plunge, CDD has still not declined much and has remained high. This could mean that LTH selling may have been the reason behind Bitcoin’s recent brief revisit below the $19k level.
BTC price
At the time of writing, Bitcoin’s price is hovering around $19.1k, down 12% in the last week. Over the past month, the crypto has lost 8% in value.
The chart below shows the trend in the price of the coin over the last five days.
The value of the crypto seems to have already recovered back above $19k | Source: BTCUSD on TradingView
Featured image from Jason Hillier on Unsplash.com, charts from TradingView.com, CryptoQuant.com
