According to data from the Bitcoin binary CDD, it has been falling in recent times. This could be a sign of market selling pressure.
Bitcoin 21-Day Binary CDD has been observing a downtrend recently
An analyst from CryptoQuant pointed this out postIt was evident that there was heavy distribution on the market a while back. The relevant indicator here is “Coin Days Destroyed” (CDD). One day of sitting still at a single address for one day is a coin day.
When a coin that was previously dormant (and was thus carrying some coin days) makes some movement on the chain, its coin days counter resets back to zero, and the coin days it had accumulated are said to be “destroyed.” The CDD metric measures the total amount of such coin days being destroyed across the network on any given day.
If this indicator has a high value, it could indicate that long-term holder are selling their coins or moving to other countries. This cohort is known for having a lot of coin days. “Binary CDD,” the version of the metric being used here, tells us whether the supply-adjusted CDD is more or less than the average supply-adjusted CDD.
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This indicator has only two possible values. The name implies that it can have 0 or 1. It’s 0 when the Bitcoin CDD is less than the average, while it’s 1 when it’s more. This chart shows the change in the 21-day moving mean value of this metric over time.
The 21-day MA of the metric seems to have fallen in recent days. Source :| Source: CryptoQuant
The graph above shows that the 21-day MA Bitcoin binary CDD was climbing between mid-October to late November. This suggests that long-term holders are dumping. While this trend was occurring, the BTC market price suffered a substantial drop. The indicator has been steadily falling in recent weeks.
This could indicate that the previous selling pressure in the BTC market has now ceased, which can lead to a bottom formation of the price.
At the time of writing, Bitcoin’s price floats around $17k, down 1% in the last week. The crypto has seen a 1% increase in value over the last month.
Below is a chart that displays the trend of the coin’s price over the past five working days.
Source:| Source: BTCUSD on TradingView