Quantitative analysis has shown that a Bitcoin indicator could have predicted the price drop in advance.
Bitcoin CDD Registered Spikes Before Recent Price Plunges
The new post An analyst on X has talked about the Coin Days Destroyed (CDD) You can use the on-chain indicator to determine early market selling pressure.
The following are some of the ways to get in touch with each other “coin day” Refers to how much 1 BTC has accumulated after remaining on the Blockchain for a day. Coin days are accumulated when a token is left dormant. Once it has been transferred to the blockchain, this counter will reset back to 0.
The number of coin days this token carried prior to its movement is called “destroyed” The transaction. CDD tracks the number of days reset on the network.
This chart shows the CDD of Bitcoin for the last two months.
Source:| Source: CryptoQuant
The Bitcoin CDD experienced a significant spike a few weeks ago, as shown in the graph above. This metric is a good indicator of the movement of some coins.
These transfers tend to be correlated with long-term holder The whales who have a lot of coins and carry them for a long time accumulate countless coin days.
It is often for sales-related reasons that these dormant entities decide to finally speak. Hence, a spike in CDD could be an indication of HODLer whales selling.
The quant highlighted in the chart the main spikes the indicator experienced during the past two months. After the spikes have occurred, it would seem that the price of the asset has taken a bearish turn.
This spike, which occurred a few weeks ago when Bitcoin was up to $67,000 and has now been erased, is also bearish. This would suggest that some diamond holders were looking at the surge in price as an opportunity to get out.
The CDD spikes were even bigger last month. This spike was near what is still the top The rally has been strong so far. The selling pressure of HODLers could have been a factor in the top that formed and the drawdown which followed.
The relationship this metric appears to have had with Bitcoin’s price may make it worth watching, since it could continue to signal the beginning of selling pressure even in the very near future.
BTC price
Bitcoin continues to fall in price and is now nearing the $62,300 mark.
It looks like the price has dropped in the past couple of days.| Source: BTCUSD on TradingView
Chart from TradingView.com. Image from Kanchanara at Unsplash.com.
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