As a researcher with a background in cryptocurrency analysis, I’ve closely monitored the Bitcoin market for several years now. The recent trend in on-chain data, specifically the spikes in the Bitcoin Exchange Inflow CDD, has piqued my interest.
Bitcoin‘s long-term investors may be behind the recent selling activity observed on the blockchain, which could be contributing to the cryptocurrency’s persistent downward trend.
Bitcoin Exchange Inflow CDD Has Registered Huge Spikes Recently
In a recent analysis for CryptoQuant, an expert noted that substantial amounts of older cryptocurrency tokens have been transferred to centralized exchanges in large quantities.
The metric we’re focusing on from transactions recorded on the blockchain is called “Exchange Inflow Coin Days Destroyed” (CDD). A “coin day” represents the amount of Bitcoin that has been inactive on the blockchain for a full day.
As a seasoned crypto investor, I’ve noticed an intriguing quirk in the world of digital currencies. When I decide to transfer a coin from my wallet after holding it for some time, its coin days counter, which measures the age of the unspent output, gets reset back to zero. In essence, those previous coin days that this specific coin had accumulated prior to the transaction are considered “lost” or “expired.” It’s a peculiar yet fascinating aspect of the blockchain ecosystem.
As an analyst, I would explain it this way: I focus on the Exchange Inflow Coingeography Destroyed Density (Exchange CDD), a specific metric within the broader Coingeography Destroyed Density (CDD) framework. While the general CDD monitors the total coin days being reset across the network, my analysis zeroes in on the coin days being destroyed exclusively through transactions into exchange-connected wallets.
As a researcher examining recent Bitcoin data, I’d like to draw your attention to this graph illustrating the development of the Bitcoin Exchange Inflow Cumulative Distribution Density (CDD) during the last month.
The graph above clearly shows that the Bitcoin Exchange Inflow CDD has experienced notable peaks this month. This observation indicates that a large number of inactive Bitcoins have been transferred to exchanges more recently.
As a crypto investor, I’ve noticed that surges in the Cumulative Dollar Down (CDD) metric often indicate activity from long-term holders (LTHs). These HODLers typically accumulate significant coin days over time. However, recent increases in Exchange Inflow CDD suggest that these “diamond hands” have been moving their coins to exchanges.
As an analyst, I’ve observed that individuals, or holders, engage in transactions with cryptocurrency exchanges whenever they require the platform’s offerings, such as selling Bitcoin. The graph indicates that these spikes earlier in the month coincided with significant drops in Bitcoin’s price, suggesting that sellers might have contributed to the market downturn during those periods.
A significant surge, more pronounced than previous ones, occurred as Bitcoin attempted to rebound from current depths following a series of price drops. However, Bitcoin’s efforts have not yet been successful, indicating that the selling pressure from Large Holder Traders might be impeding its progress.
The future conduct of the Exchange Inflow CDD is uncertain, and it may yet lead to additional surges that could hinder Bitcoin’s efforts to bounce back.
BTC Price
At the time of writing, Bitcoin is trading at around $57,900, up more than 4% over the past week.
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2024-07-13 01:16