Bitrabo Editorial
Recent on-chain data suggests that Bitcoin long-term holders have eased off profit-taking activities following a period of intense selling.
Decrease in Bitcoin Coin Days Destroyed Signals Calmer Market
An analysis by the BTC on-chain research account, “The Bitcoin Researcher,” highlighted a decline in the Coin Days Destroyed In Profit metric. Coin Days represent the accumulation of time a Bitcoin remains inactive on the blockchain. When a dormant coin is moved, its accumulated Coin Days reset to zero, signifying the destruction of those days. The Coin Days Destroyed (CDD) metric monitors the total number of Coin Days eliminated daily due to coin movements on the blockchain. Spikes in this indicator indicate significant activity involving older coins, usually initiated by long-term holders (LTHs) who typically hold onto their coins for extended periods.
LTHs, known for their strong holding tendencies, tend to trigger spikes in CDD when they decide to sell, resulting in increased selling pressure. The recent analysis specifically focuses on profit-taking actions by these investors, highlighting a decline in the CDD values for coins in profit prior to movement.
The chart displaying this Bitcoin metric over the past few years illustrates a notable rise in Bitcoin CDD In Profit levels during the recent rally towards a new all-time high.
Following the rally and subsequent drawdown phase, the CDD value has decreased, indicating a reduction in selling pressure from LTHs. Although the ‘CDD In Profit’ levels have dropped to relatively low points, they still remain elevated compared to the bear market levels. This decrease could potentially indicate a slowdown or near exhaustion of LTH profit-taking activities.
The future Bitcoin price trajectory will reveal whether this reduction in profit-taking by LTHs paves the way for a possible rally.
Current Bitcoin Price
Bitcoin’s price recovery momentum has slowed down recently, with the asset consolidating around the $64,000 mark.