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Bitcoin Bearish Signal: Old Supply On The Move Again

Bitcoin Bearish Signal: Old Supply On The Move Again

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Data from the chain shows that old Bitcoin supply has recently been moved to exchanges, which could be a bearish trend for the price of the crypto.

Bitcoin Exchange Inflow CDD has risen over the past day

As noted by an analyst in a CryptoQuant post, long-term holders have deposited some coins into exchanges over the past day.

There are two relevant indicators here; the first is “exchange flow”, which measures the total amount of Bitcoin sent to the wallets of all centralized exchanges.

For another, there is a concept called “coin days” that is used as a measure of a network’s idle supply. Every time 1 BTC sits on the chain for one day, it accumulates one coin day. The total number of coin days tells us how many days the item has been left motionless.

However, when a coin that has accumulated some coin days moves, these coin days are reset or “destroyed”. “Coin Days Destroyed” (CDD) is a metric that tracks the number of such coin days online.

Now here is a graph showing the trend of Bitcoin CDD specifically for AC transactions:

Looks like the 7-day EMA value of the metric has been elevated recently | Source: CryptoQuant

As you can see in the chart above, the Bitcoin AC CDD has seen a spike over the past day.

Since the presented indicator only applies to spot exchanges, these transactions were probably made with the intention of selling, since investors usually use these exchanges.

The long-term holder group is a type of cohort in the BTC market that includes all those investors who hold their coins for a long time without selling or transferring them, thus accumulating a large number of coin days in the process.

As such, spikes in CDD generally indicate that old supply (ie, the supply owned by long-term holders) is on the move. LTH sales have historically been bearish on the price of Bitcoin.

The last spike of a similar scale was seen just a few days ago, around which the coin’s price saw a short-term decline.

The graph also shows the trend in the used output of income streams in age groups, which is an indicator that highlights the shares of individuals in the income streams coming from different groups of holders in the market.

It appears that several cohorts have shown movement recently, with long-term holders of 6-12 month old coins particularly active.

BTC price

At the time of writing, Bitcoin is hovering around $18.6,000, down 5% from last week.

Bitcoin Price Chart

BTC continues to be rangebound | Source: BTCUSD on TradingView
Featured image from Hans-Jurgen Mager on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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