Bitcoin’s Recent Market Movement Reflects Ongoing Upward Momentum, Even as Short-Term Fluctuations Suggest Some Cooling

Bitcoin’s recent market movement reflects ongoing upward momentum, even as short-term fluctuations suggest some cooling. As of today, BTC trades at $103,485

Bitcoin (BTC) price has recently shown signs of pulling back from its recent highs as the crypto market leader now trades below the $104,000 mark.

Despite the recent uptick in price, it seems that some technical indicators are signaling that a new stage of market rotation or a shift in investor behavior may be unfolding.

As Bitcoin continues to move in a relatively high-leverage and volatile fashion, new data from CryptoQuant may suggest that some of the remaining long-term holders (LTHs) are beginning to take profits and exit their positions.

Bitcoin Binary CDD signals potential market rotation

CryptoQuant analyst Avocado Onchain noted a key indicator known as Binary Coin Days Destroyed (CDD), which helps to measure the activity of long-term dormant Bitcoin. The Binary CDD increases when older coins are moved after remaining untouched for extended periods of time, usually a sign of LTHs entering the market or preparing to sell.

Typically, spikes in Binary CDD have coincided with market tops or phases where there is increased distribution from early Bitcoin holders to newer market participants. According to Avocado, applying a 30-day moving average to the Binary CDD helps to smooth out the data and provides a clearer picture of the macro trends.

During previous bull rallies for Bitcoin, including in late 2021 and during the twin peaks of 2024, the Binary CDD moved past the 0.8 threshold. That level has historically signaled a heightened level of movement from LTHs, usually aligning with increased selling pressure or profit-taking behavior.

Currently, the indicator is sitting close to 0.6 and is trending higher as Bitcoin attempts to retest its highs. If the Binary CDD does cross the 0.8 mark again, it may suggest that another wave of distribution is unfolding.What makes Binary CDD useful is that it can help to highlight potential shifts in the market structure. When LTHs begin to move large volumes of BTC, it usually signals the beginning of profit-taking, especially if it occurs at high prices and strong market sentiment.

However, the indicator cannot be used in isolation to confirm any sell-offs and it's best viewed in conjunction with other context, such as exchange inflows and broader trading data to provide a complete interpretation.

In a broader sense, the current uptick in Binary CDD may point to Bitcoin entering a transitional stage. Rather than signaling the end of a bull trend, it could indicate that notable investors are gradually rotating capital or responding to price action in anticipation of near-term changes.

In a separate market signal, another CryptoQuant analyst, EgyHash, highlighted concerns regarding the Exchange Stablecoins Ratio (USD), a metric that compares Bitcoin reserves to stablecoin holdings on exchanges.

According to EgyHash, this ratio has risen to around 5.3, surpassing the threshold of 5.0, which previously coincided with phases of distribution in the market. A similar level in late January led to a Bitcoin price pullback, and the current reading suggests that more traders may be preparing to sell, possibly rotating BTC holdings back into stablecoins or fiat equivalents.