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Will Bitcoin Fall Further? Long-term holders ramp up sales

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On-chain data suggests that long-term bitcoin holders have recently increased their sales, which could lead to a further drop in the crypto’s price.

Bitcoin exchange CDD’s inflow surged over the past day

As one analyst noted in a CryptoQuant post, the current increase in CDD is the largest since October 6.

A “Coin Day” is the amount 1 BTC accumulates at an address after it has been stable for 1 day. Finally, if a coin that has accumulated a certain number of coin days is moved to another wallet, the coin day counter is reset and the coin days are said to be “destroyed”.

The “Coin Days Destroyed” (CDD) metric indicates the total number of such Coin Days destroyed in the network on a given day.

Another version of this indicator is “exchange inflow CDD” which measures only coin days reset due to trades from centralized exchanges.

Now, here’s a chart showing the trend in bitcoin exchange inflows (CDD) over the past month:

The value of the metric appears to have increased over the past day. Source: Cryptoquant

As you can see in the chart above, the Bitcoin exchange Inflow CDD has shown a strong increase in value recently.

The BTC market has the so-called “long-term holders” (LTH) group, which includes all investors who hold their coins for a long time without transferring them.

Related Reading: Bitcoin Capitulation Deepens as SOPR Metric Drops to December 2018 Low

Due to the passivity of their coins, LTHs accumulate a large number of coin days. Therefore, when these holders move their coins, the CDD usually increases due to CoinDesk’s scale.

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Thus, the current spike in bitcoin exchange CDD influx suggests that some LTH have deposited their coins in exchange wallets.

Since the exchanges in question are spot platforms, it is possible that this movement of coins is done for the purpose of selling.

It is clear from the chart that the bitcoin price fell after both previous major spikes in the indicator.

If the latest increase was also due to LTH preparing to dump its coins, the crypto could also see a bearish trend this time around.

bitcoin price

At the time of writing, bitcoin price is hovering around $16.4k, down 2% over the past week. Over the past month, the crypto has lost 15% in value.

The price of the coin seems to have bounced back sideways in recent daysSource: BTCUSD on TradingViewFeatured image by Zdeněk Macháček on Unsplash.comCharts from TradingView.com, CryptoQuant.com

source: newsbtc.com

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