Bitcoin CDD Rises After Trough, but Selling Is Not the Only Explanation

The Bitcoin Coin Days Destroyed indicator is showing a notable move. After hitting a two-year low, the 30-day average of the CDD is picking up again. At first glance, this seems to point to increasing selling pressure from long-term holders, but the reality is somewhat more nuanced.

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In brief:

• Bitcoin’s CDD indicator is recovering from a two-year low, signalling activity among long-term holders.
• A rising CDD does not necessarily mean holders are selling en masse; the Coldcard security event is playing a distorting role.
• At the end of July, the number of moved UTXOs from long-term holders spiked notably.

What the CDD indicator measures

CDD stands for Coin Days Destroyed and is a metric that tracks how long a UTXO was held before being moved. The longer a Bitcoin remains untouched, the higher its contribution to the CDD when it is eventually moved. In this way, the indicator provides insight into how active long-term holders are with their holdings.

The fact that the 30-day average is now rising again after a two-year low means that holders who had kept their Bitcoin for more than six months are starting to move their coins. A rising CDD is typically associated with increasing selling pressure, because large moves of long-term Bitcoin have historically coincided with profit-taking.

Coldcard event skews the picture

However, analyst Darkfost warns that this interpretation is misleading in this case. The peak visible at the end of July in the data of the so-called Spent Output Age Bands coincides with the Coldcard event. This prompted many long-term holders to move their Bitcoin, not to sell, but to improve the security of their wallets.

That peak is also clearly visible in the second chart, where the number of moved UTXOs from older age bands rose sharply around 1 August. Afterwards, activity quickly fell back to its previous level. Bitcoin is currently at $65K, up 0.5% over the past 24 hours.