On-chain data shows selling from Bitcoin long-term holders may have been behind the recent dip in the crypto’s price below $19k.
Bitcoin Exchange Inflow CDD has recently seen a sharp increase
A CryptoQuant analyst has pointed out that long-term holders have been feeling some selling pressure recently.
The relevant indicator here is the Bitcoin “Coin Days Destroyed” (CDD). One BTC is considered a coin day if it has accumulated exactly one BTC in a single day. Therefore, the total coin day in the market is the time that each coin has been inactive for.
When these coins that had previously been sitting still show some movement, the coin days gained by them are said to be “destroyed” as they reset back to zero. This is exactly how the CDD metric measures.
Because long-term holders hold their coins for longer periods of time, the coin day average is significantly greater than that of the rest. This can indicate that there is activity in this group.
This chart shows how the Bitcoin CDD is trending, not just for the whole network but for specific exchange inflow transactions.
The 14-day moving average of the metric seems to have been very high in the recent days. Source: CryptoQuant| Source: CryptoQuant
You can see that Bitcoin’s exchange inflow CDD witnessed a recent spike in its MA value of 14 days. These numbers suggest that the Bitcoin exchange inflow CDD has seen a spike in its 14-day MA value.
These spikes in exchange inflow CDD were historically bearish for crypto’s price because these investors often deposit on exchanges to dump their funds.
This time as well, shortly after the indicator’s values became raised, BTC observed a plunge from a local high of around $22.5k.
Following this plummet, however, the exchange inflow CDD still hasn’t gone down much and has remained elevated. This could imply that LTH selling may have been the cause behind Bitcoin’s recent brief revisit below the $19k level.
BTC price
At the time of writing, Bitcoin’s price floats around $19.1k, down 12% in the last week. The crypto’s value has fallen 8% over the last month.
Below chart displays the trends in the value of the coin during the last five working days.
It seems that the value of crypto has already recovered above $19k. Source: tradingview.com BTCUSD| Source: BTCUSD on TradingView
Featured Image by Jason Hillier, Unsplash.com. Charts from TradingView.com and CryptoQuant.com.