According to this on-chain indicator, one analyst explained how the next potential local high for bitcoin could be $89,200.
bitcoin CVDD “Scaling Tops” Metric Could Suggest Next Potential Top
in a new x.com/ali_charts/status/1799872338835419245″ target=”_blank” rel=”nofollow”>mail Over at x, analyst Ali Martinez has talked about where the next high for btc could be based based on accumulated value days destroyed (CVDD). CVDD is an on-chain metric derived from Coin Days Destroyed (CDD).
A “coin day” is the amount that 1 btc accumulates after remaining idle on the blockchain for 1 day. When a coin that has accumulated a certain number of coin days moves around the network, the coin days it carried are naturally reset to zero and are said to be “destroyed.”
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The CDD measures the number of days worth of coins that are destroyed in the market on a given day. Since each transaction also carries a dollar value based on the price at that time, the CVDD adds another layer of context to the CDD by accounting for the dollar value of each coin, breaking dormancy to destroy your coin days.
Unlike CDD, which tracks only the number of days of coins that are destroyed on a given day, CVDD is a cumulative sum of the asset's history. More formally, CVDD is calculated as a ratio between the cumulative sum of the value-time of destruction on the network divided by the age of the cryptocurrency.
Analyst Willy Woo devised the original CVDD, which has proven to be remarkably accurate in locating all-time lows in the asset's price. However, in the context of the current topic, the modification “Evaluation of the tops” by the author of CryptoQuant Equality is of interest.
This indicator combines the 50-day moving average (MA) of the bitcoin spot price with the CVDD and aims to evaluate probable high points of the asset, as its name indicates.
Now, here is a chart showing what the value of bitcoin Assessing Tops has been looking like recently:
From the chart, it can be seen that the bitcoin spot price had briefly surpassed the evaluation highs in March. When the asset surpasses this indicator, its price usually overheats and is prone to forming highs. It appears that this also held true during this recent pause, as the asset hit a high soon after.
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The bitcoin Assessing Tops indicator is currently worth $89,200. While a top may not necessarily form if bitcoin rises to this level, a peak may at least approach when it does if this indicator holds.
btc Price
At the time of writing, bitcoin is trading at around $69,300, down more than 1% over the past week.
Dall-E Featured Image, CryptoQuant.com, TradingView.com Chart
