The on-chain data shows that long-term Bitcoin holders have been persistent lately as their movements remain at subdued levels.
Bitcoin’s binary CDD has continued to be at low values recently
According to data from the on-chain analytics company glassMature currencies do not show much movement despite recent fluctuations in the asset’s price. A relevant indicator here is Coin Destroyed Days (CDD), which, to understand the concept of Coin Days, should be looked at first.
A coin day is the amount that 1 BTC accumulates when it sits dormant on the blockchain for one day. When any coin that has been dormant for a number of days, and thus has accumulated some coin days, is finally moved onto the network, its coin days counter is naturally reset to zero.
The days of coins previously held by the coin in this example are said to be “ruined”. The BTC CDD tracks the total number of days of coins being destroyed or reset throughout the blockchain on any given day.
However, the regular CDD version isn’t the important thing here; A modified version called “Bi-Intensive Care” is. This measure compares the current CDD value with the long-term trend.
As its name already suggests, this indicator can only have two values: 0 and 1. When its value is 0, it means that CDD is below the long-term average at the moment, while when it is equal to 1, it means that CDD is higher at the moment.
Now, here is a chart showing the trend in Bitcoin’s 7-day binary CDD SMA over the past few years:
The value of the metric seems to have been quite low in recent days | Source: Glassnode on Twitter
As shown in the chart above, the 7-day CDD binary SMA Bitcoin has had very low values for a while now. This means that there haven’t been many high-aged coins moving around lately.
In general, whenever CDD has elevated values, this is a sign that long term holders (LTHs) are on the move. The LTH group includes all investors who have been holding their coins for at least 155 days.
Since these investors tend to remain dormant for long periods, they naturally accumulate large amounts of coin days. Thus, whenever these investors show any significant activity, the CDD of the giants goes up as the large numbers of their coin days are reset.
From the chart, it is clear that the 7-day SMA Bitcoin binary CDD has moved up during the bull market in the first half of 2021, indicating that LTHs were participating in profit-taking at that time.
However, in recent months, neither the rally nor the recent volatility due to factors such as the SEC accusations against Binance and Coinbase have been able to force Bitcoin LTHs to make any significant moves.
BTC price
At the time of writing, Bitcoin was trading at around $26,500, up 2% in the past week.
BTC has made some recovery recently | Source: BTCUSD on TradingView
Featured image by Aleksi Räisä on Unsplash.com, charts from TradingView.com, Glassnode.com
