On-chain data shows that Bitcoin’s binary CDD has been falling recently, a sign that the selling pressure in the market may be exhausting.
Bitcoin 21-day MA Binary CDD has recently seen a downtrend
As noted by an analyst in a CryptoQuant after, there was a heavy distribution on the market a while ago. 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 a single address.
When a coin that was previously dormant (thus carrying some coin days) makes any movement on the chain, the coin days counter is reset to zero and the coin days it had accumulated are said to be “destroyed”. The CDD metric measures the total number of coin days destroyed across the network on a given day.
When this indicator has a large value, it means that long-term holders may be moving or selling their coins as this cohort tends to accumulate huge numbers of coin days. “Binary CDD”, the version of the metric used here, tells us whether the supply-adjusted CDD is more or less than the average supply-adjusted CDD.
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As the name implies, this indicator can only have two values, 0 and 1. It is 0 when the Bitcoin CDD is less than the average, while it is 1 when it is more. Here’s a chart showing the trend in the 21-day moving average value of this metric over the past few months:
Looks like the 21-day MA value of the metric has been on the way down in recent days | Source: CryptoQuant
As you can see in the chart above, the 21-day MA Bitcoin binary CDD was rising between mid-October and late November, suggesting that the long-term holders were dumping. The BTC price took a major hit while this trend was taking place. Instead, however, the indicator has fallen rapidly in recent weeks.
This could be a sign that the selling pressure previously present in the BTC market is now exhausting, paving the way for a bottom price formation.
BTC price
At the moment of writing, The price of Bitcoin floating around $17k, down 1% over the past week. The crypto has increased in value by 1% in the past month.
Below is a chart showing the trend in the coin’s price over the past five days.
The value of the crypto seems to have dipped down in the last twenty-four hours | Source: BTCUSD on TradingView