Bitcoin Long-Term Holder Dumping May Have Been Behind Revisit Below $19k

Keshav Verma

1 year ago

3 mins read

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On-chain data shows selling from Bitcoin long-term holders may have been behind the recent dip in the crypto’s price below $19k.

Bitcoin Exchange Inflow CDD Has Recently Observed A Sharp Increase

As pointed out by an analyst in a CryptoQuant post, there has been some possible selling pressure coming from the long-term holders recently.

The relevant indicator here is the Bitcoin “Coin Days Destroyed” (CDD). A coin day is defined as the amount accumulated by exactly 1 BTC when sitting idle for 1 full day. The total number of coin days in the market, therefore, represent the sum of time each coin in the supply has been dormant for.

When these coins that had previously been sitting still show some movement, the coin days gained by them are said to be “destroyed” as they reset back to zero. The total number of these is precisely what the CDD metric measures.

Now, since long-term holders keep their coins for long periods, they naturally accumulate significantly higher coin days than the rest of the market. As such, spikes in the CDD can be a sign of activity from this cohort.

Here is a chart that shows the trend in the Bitcoin CDD not for the entire network, but specifically for exchange inflow transactions:

Looks like the 14-day moving average value of the metric has been quite high in recent days | Source: CryptoQuant

As you can see in the above graph, the Bitcoin exchange inflow CDD saw a spike in its 14-day MA value just recently. This suggests that long-term holders have been making some big deposits to exchanges during the last week.

In the past, such spikes in the exchange inflow CDD have usually been bearish for the price of the crypto as these investors usually deposit to exchanges for dumping purposes.

This time as well, shortly after the indicator’s values became raised, BTC observed a plunge from a local high of around $22.5k.

Following this plummet, however, the exchange inflow CDD still hasn’t gone down much and has remained elevated. This could imply that LTH selling may have been the cause behind Bitcoin’s recent brief revisit below the $19k level.

BTC Price

At the time of writing, Bitcoin’s price floats around $19.1k, down 12% in the last week. Over the past month, the crypto has lost 8% in value.

The below chart shows the trend in the price of the coin over the last five days.

The value of the crypto seems to have already recovered back above $19k | Source: BTCUSD on TradingView

Featured image from Jason Hillier on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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