On-chain data shows that long-term bitcoin holders have finally cooled off their profit-taking after showing a massive sell-off just before.
Destroyed bitcoin Coin Days Have Calmed Down for btc Recently
As noted by btc on-chain research account “The bitcoin Researcher” in a twitter.com/ResearchBTCNow/status/1787507923897233727″ target=”_blank” rel=”noopener nofollow”>mail On x, the Coin Days Destroyed In Profit metric has recently declined. A “coin day” is an amount that accumulates 1 btc after remaining idle on the blockchain for 1 day. Therefore, when a coin remains motionless in the same direction for a while, it carries a certain number of coin days.
When a coin like this finally moves on the network, the coin days count is reset to zero and the coin days it had been holding are said to be “destroyed.” Coin Days Destroyed (CDD) tracks the total number of coin days that are destroyed in this way across the entire blockchain on a given day. When the value of this indicator increases, it means that a large number of ancient coins are in motion.
These spikes are attributed to “long-term holders,” investors who typically tend to HODL their coins for long periods of time. This group has large days of coins, so their movements end up causing the destruction of a large amount of them.
However, big moves by these investors are not that common, as they are HODLers by nature who remain tight-lipped despite what may be happening in the overall market. When LTHs break their slumber, it is usually to sell, so spikes in CDD may correspond to selling pressure emerging from this group.
In the context of the current topic, profit-taking by these investors is specifically interesting, which is why the analyst has cited CDD data only for coins that were generating profits before the move.
Here is the chart of this bitcoin indicator over the past few years:
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The value of the metric appears to have registered a drawdown in recent weeks | Source: twitter.com/ResearchBTCNow/status/1787507923897233727/photo/1" target="_blank" rel="noopener nofollow">@ResearchBTCNow on x
As shown in the chart above, bitcoin's CDD In Profit had risen to very high levels earlier when btc's rally towards the new all-time high occurred.
This extraordinary spike would suggest that the rush had enticed even these diamond traders to reap its profits. However, as the asset's decline unfolded following this rally, the value of the metric declined, suggesting a decline in LTH selling pressure.
The 'CDD In Profit' has now dropped to relatively low levels, although its value is still higher than during the bear market. Given this trend, LTH's profit-taking may have exhausted itself for now, or at least is close to it.
It now remains to be seen how bitcoin's price evolves from here, as perhaps one of the main obstacles to the rally is no longer in the asset's way.
btc Price
bitcoin's rally surge has slowed in recent days as the asset's price has continued to consolidate around the $64,000 level.
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Looks like the price of the asset has overall registered a jump in the past five days | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, researchbitcoin.net, chart from TradingView.com
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