Bitcoin Long-Term Holder Dumping May Have Been Behind Revisit Below $19k
September 20 2022 - 3:00PM
NEWSBTC
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 Observed A Sharp Increase
As pointed out by an analyst in a CryptoQuant post, there has been
some possible selling pressure coming from the long-term holders
recently. The relevant indicator here is the Bitcoin “Coin Days
Destroyed” (CDD). A coin day is defined as the amount accumulated
by exactly 1 BTC when sitting idle for 1 full day. The total number
of coin days in the market, therefore, represent the sum of time
each coin in the supply has been dormant 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. The total number of these is precisely what the CDD metric
measures. Related Reading: These Two On-Chain Signals Precede
Bitcoin Falls, Suggests Analyst Now, since long-term holders keep
their coins for long periods, they naturally accumulate
significantly higher coin days than the rest of the market. As
such, spikes in the CDD can be a sign of activity from this cohort.
Here is a chart that shows the trend in the Bitcoin CDD not for the
entire network, but specifically for exchange inflow transactions:
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 above graph, the Bitcoin exchange inflow CDD saw a spike in its
14-day MA value just recently. This suggests that long-term holders
have been making some big deposits to exchanges during the last
week. In the past, such spikes in the exchange inflow CDD have
usually been bearish for the price of the crypto as these investors
usually deposit to exchanges for dumping purposes. Related Reading:
Bitcoin Price Bottom To Take Place In Q4 This Year, Crypto Expert
Predicts 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. Over the past month, the crypto has lost 8% in value. The
below chart 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
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