A quant has pointed out how a Bitcoin metric may have detected selling pressure in the market, and therefore, the subsequent price drops, in advance.
Bitcoin CDD Registered Spikes Before Recent Price Plunges
In a new post on X, an analyst has discussed about how the Coin Days Destroyed (CDD) on-chain indicator may be used to identify selling pressure in the market early.
A “coin day” refers to the quantity that 1 BTC accumulates after staying still on the blockchain for 1 day. When a token stays dormant for a while, it naturally accumulates some number of coin days, and once it’s finally transferred on the network, its coin days counter resets back to zero.
The coin days that this token had been carrying prior to this movement are said to be “destroyed” by the transaction. The CDD keeps track of the total number of such days being reset across the network on any given day.
Now, here is a chart that shows the trend in the CDD for Bitcoin over the last couple of mo
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