On-chain data shows that long-term Bitcoin holders have been potentially selling recently, which could explain the ongoing downward trend in BTC prices.

The inflow to the Bitcoin CDD exchange has seen huge spikes recently

As an analyst at CryptoQuant Quicktake fasting As explained, senior cryptocurrency tokens have recently been deposited in vast quantities on centralized exchanges.

The on-chain metric of interest here is “Coin Demand Days Destroyed (CDD).” “Coin Demand Day” refers to the amount that 1 BTC accumulates after 1 day of dormancy on the blockchain.

When a coin that has been sitting still in a wallet is finally moved, the coin holding days counter naturally resets to zero, and the holding days of the coins that were in the wallet before the move are considered “destroyed.”

CDD tracks the total number of coin days reset in this way across the entire network. In the context of the current topic, the general CDD is not the one we are focusing on, but rather the Exchange Inflow CDD, which only tracks coin days destroyed via transactions in wallets connected to exchanges.

Here is a chart showing the trend in fund inflows to the Bitcoin exchange over the past month:

As you can see from the chart above, Bitcoin Exchange Inflow CDD has seen several significant spikes this month. This would indicate that many dormant coins have recently seen deposits on exchanges.

Generally speaking, spikes in CDD correlate with the movement of long-term holders (LTH), as these HODLers tend to accumulate vast amounts of coins days. Therefore, the recent spikes in Exchange Inflow CDD suggest that these diamond hands have been moved to exchanges.

Holders trade on exchanges when they want to take advantage of one of the services offered by these platforms, which may include selling. The chart shows that the gains earlier in the month came as Bitcoin fell toward its lows, suggesting that selling pressure from this group may have played a role in the crash.

The latest spike, larger than the others, came as BTC attempted to start a rally off recent lows. BTC has had no luck so far, suggesting that LTH selling is potentially holding the coin back.

The question remains how the CDD indicator of inflows will behave in the coming days and whether any potential further increases will hinder Bitcoin’s path to recovery.

BTC price

At the time of writing, Bitcoin is trading at around $57,900, up over 4% over the past week.