Bitcoin falls below $16k as older whales show signs of dumping
On-chain data shows signs of dumping from the Bitcoin whales as the price of the crypto falls below $16k.
Bitcoin Exchange Inflow CDD has increased in recent days
As pointed out by an analyst in a CryptoQuant post, a large amount of dormant coins seem to have moved recently.
The relevant indicator here is “Coin Days Destroyed” (CDD). A coin day is the amount that 1 BTC accumulates after sitting idle at a single address for 1 day.
When a coin that has a certain number of mint days finally shows movement, the coin days counter is reset to zero and the coin days are said to be “broken”.
The CDD calculation measures the total number of these coin days destroyed across the entire supply at any given time.
A modified version of this indicator is the “exchange supply CDD”, which tells us the number of coin days that reset specifically due to transactions entering exchanges.
Here is a chart showing the trend of this Bitcoin indicator over the last few years:
Looks like the value of the metric has been quite high in the last few days | Source: CryptoQuant
As you can see in the graph above, CDD inflows for Bitcoin exchanges have increased to some pretty high values recently.
This means that investors have submitted a large number of coins to exchanges, especially coins that have previously been dormant for a long time.
It is also clear from the graph that the recent levels of the indicator are the highest they have been since the peak back in July 2021, which occurred shortly before the bottom of the May-July mini-bear that year.
Large currency inflows can have bearish effects on the price as investors may put money into these platforms for selling purposes.
In particular, the influx of long-term holders, who hold their coins for long periods and accumulate a large number of coin days, can have noticeable effects on the market since they are the group least likely to sell at any given time.
Following this recent surge in Bitcoin exchange CDD, the cryptocurrency has observed a decline below the $16k level, suggesting that it may be the selling from these whales holding old coins that is behind the valley.
BTC price
At the time of writing, Bitcoin’s price is hovering around $16k, down 4% in the last week.
The crypto's value seems to have rebounded back above $16k for now | Source: BTCUSD on TradingView
Featured image from Thomas Lipke on Unsplash.com, charts from TradingView.com, CryptoQuant.com
