On-chain data shows signs of dumping by the Bitcoin whales as the price of the cryptocurrency drops below $16,000.
Bitcoin Exchange CDD inflows have surged in recent days
As noted by an analyst in a CryptoQuant afterseems to have moved a large amount of dormant coins recently.
The relevant indicator here is “Mint days destroyed(CDD). A coin day is the amount that 1 BTC accrues after standing still for 1 day at one address.
Whenever a coin containing a certain number of coin days finally shows movement, the coin day counter for it is reset to zero and the coin days are said to be “destroyed”.
The CDD metric measures the total number of these coin days that are destroyed across the entire supply at any given time.
A modified version of this indicator is the “exchange inflow CDD”, which tells us about the number of coin days that are reset specifically due to trades going on exchanges.
Here is a chart showing the trend in this Bitcoin indicator over the past few years:
Looks like the value of the metric has been quite high in the last few days | Source: CryptoQuant
As you can see in the chart above, the Bitcoin exchange’s CDD inflows have been rising to quite high levels recently.
This means that investors have been sending a large number of coins to exchanges, especially coins that have previously been dormant for a long time.
The chart also shows that the latest levels of the indicator are the highest since the peak in July 2021, which occurred shortly before the bottom of the May-July mini-bear that year.
Large currency inflows can have bearish effects on the price as investors may be depositing into these platforms for selling purposes.
In particular, the influx of the long-term holders, who hold their coins for long periods and accumulate a large number of coin days, can have a noticeable impact on the market, as they are the cohort least likely to sell at any given time.
Following this recent spike in inflows from Bitcoin exchange CDD, the price of the crypto has seen a drop below the $16,000 level, suggesting that it may be the sale of these old coin whales that is behind the dip.
BTC price
At the moment of writing, The price of Bitcoin floating around $16k, down 4% over the past week.
The crypto's value seems to have rebounded back above $16k for now | Source: BTCUSD on TradingView
Featured image from Thomas Lipke on Unsplash.com, charts from TradingView.com, CryptoQuant.com
