Bitcoin CDD Has Registered A Sharp Increase Recently

On-chain data shows the Bitcoin Coin Days Destroyed (CDD) has spiked to a six-year high recently. Here's what this could mean for BTC's price.

A recent uptick in on-chain activity suggests that a large number of dormant Bitcoin coins have begun to be involved in transactions again, as evidenced by the six-year high in the 60-day moving average (MA) of the Bitcoin Coin Days Destroyed (CDD).

Coin days are a measure of the total time that 1 BTC has been held on the network (i.e., sitting still in a single address) for 1 day. As coins remain motionless for a number of days, they gain coin days of the corresponding amount. When they are moved, their coin days counter naturally resets back to zero, and the coin days that they had previously been holding are said to be ‘destroyed.’

The CDD is an indicator that measures the total number of coin days being destroyed in this manner across the blockchain every day.

“This metric showcases the coin days being destroyed on the Bitcoin network each day, and as you can see in the chart below, the 60-day MA of the indicator has recently crossed the 24 million mark,” CryptoQuant analyst Maartunn explained.

To put things into perspective, the last time the indicator was at such a high level was back in 2016.

CDD movements from the long-term holders (LTHs) are usually indicated by spikes in the metric. The LTHs, who hold tightly through rallies and crashes alike and accumulate vast amounts of coin days in the process, are the steadfast entities in the sector.

Only when they believe it’s time to sell do the LTHs typically break their silence; thus, high CDD values can indicate that these diamond hands are participating in a selloff.

Some sort of top in the Bitcoin price has frequently coincided with peaks in the indicator, as can be seen from the chart. This trend was last seen in Q1 2024.

It’s possible that the latest potential selloff from the LTHs could also have a similar effect on the cryptocurrency, given this historical pattern. This may also already be in action, as the asset has been following a bearish trajectory since its top above the $108,000 level in mid-December.

At press time, Bitcoin is trading around $95,600, having risen almost 3% in the last 24 hours.