Selling pressure on Bitcoin: How far will the BTC price fall?
4 min readTable of Contents
When analyzing cryptocurrencies, Coin Days Destroyed (CDD) is an important metric to analyze the selling pressure on Bitcoin and understand its potential impact on market prices. The latest findings from CryptoQuant show the observing analyst that without overcoming this pressure, no new uptrends will emerge.
Particularly noteworthy is the fact that the last significant CDD data was recorded on April 24. Accordingly, it is clear that another decisive phase in the coin spot market is likely to emerge in the coming days.
Analysis of BTC investor behavior and the impact on Bitcoin prices based on CDD data
But what does CDD actually mean? You will find out in more detail later in the article how this metric is essential for the course of the bull market. Coin Days Destroyed is an indicator that provides a value that measures how many days a certain amount of Bitcoins has not been moved before it is finally sold or transferred.
A high number of destroyed Coin Days provides reason to believe that long-held coins are being moved, which is often interpreted as a potential signal for selling activities.
Detecting Selling Pressure in #Bitcoin with CDD Data and Its Impact on Prices
“Without breaking this pressure, new uptrends won't emerge. The last high CDD data in the spot markets was on April 24th.” – By @theKriptolik
Full post 👇https://t.co/bVDCOGxST3
— CryptoQuant.com (@cryptoquant_com) April 29, 2024
If crypto investors who have previously held their coins for a long time now start to sell their cryptocurrencies, this can be a sign of increased selling pressure and potentially falling prices.
The last high CDD activity in the crypto market: This is what the outlook for the crypto forecast looks like
On April 24, a high CDD was recorded in the spot market. This means that a significant amount of long-term Bitcoins were sold on that day. Such movements are always critical in cryptocurrencies, as they alert us that large investors, or so-called “whales,” may be starting to liquidate their holdings.
Such initial market sales can lead to increased supply in the market in the distant future. As a result, fundamental pressure would then be exerted on prices in addition to the volatility of daily news. The findings from the CDD data are significant for observers of the crypto market, as they provide a deeper insight into the market sentiment as a whole and, as such, the future outlook of prices.
In the past, a persistently high CDD value has often indicated that the market is still under selling pressure. Accordingly, with such values of the metric, the chances of a speedy recovery in Bitcoin prices are lower.
Within the graph provided by Cryptoquant, we can see in detail how the Bitcoin price has developed in relation to Coin Days Destroyed (CDD) over the past few months. In addition to the obvious statements, various key information and possible hypotheses can be worked out from the BTC chart.
Movement of trend holders is starting to resurge
“Movement of this entity can be seen as data for volatility confirmation rather than for price increases or decreases. It appears that volatility is likely to emerge soon.” – By @mignoletkr
Read more 👇https://t.co/MFOIhOP9X1
— CryptoQuant.com (@cryptoquant_com) April 25, 2024
Bitcoin Analysis: A Look at Price Dynamics and Selling Pressure on BTC
The timeline shown, which spans the last two months, highlights significant movements that may be of interest to investors.
A notable pattern that emerges from the chart is the appearance of spikes in the CDD data that directly correlate with Bitcoin price declines. CDD values are increasing significantly, indicating that long-term Bitcoin holdings are being sold. Particularly noticeable is the last spike in CDD on April 24, just before a significant drop in Bitcoin price was recorded.
Clear CDD spikes as Bitcoin sell indicators: Correlation between CDD and price movements
The CDD data provides a deeper level of market analysis as it takes into account not only volume but also the age of the coins being moved. A trend has emerged in recent weeks: whenever the CDD reaches a high, a downturn in price follows. This could indicate that more experienced investors or whales are changing their positions, which in turn could influence smaller investors and lead to a broader sell-off.
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