Coin Days Destroyed (CDD)
When UTxO is destroyed, Coin Days Destroyed (CDD) is calculated as the sum value of the number of days between created and spent multiplied by UTxO amount.

Definition

Coin Days evaluates the number of coins that are not being spent, which gives more weight to estimate long-term-holder(LTH) position. When that coin is spent, the coin is considered "destroyed," and is being updated on Coin Days Destroyed(CDD) metric. CDD is the sum of products of spent transaction output alive days and its value.
CDD=ospent outputslifespanovalueoCDD=\sum_{o \in \text{spent outputs}}\text{lifespan}_o*\text{value}_o

Interpretation

By value itself

  • High: Long-held coins are moving in great amounts -Volatility Risk or Possible Trend Reversal
    A large number of alive days are destroyed which indicates that long-term holders' coins are exposed to selling. Since coins held long have a huge impact on the market,
  • Low: Long-held coins are moving in less amount

By examining trend

  • Increasing trend: Increasing selling pressure
    Long term holders' coins are continuously being sold
  • Decreasing trend: Decreasing selling pressure
    Long term holders' coins are slowing down in movement

Note on CDD

CDD gives more weight to
1) longer-lived UTXO
2) Amount of UTXO is holding BTC.
Weighting more on these makes the indicator sensitive to long-term holders’ movement and show sentiment & behavior.

Explanation on creation and destruction of UTXO(s)

For every coin that has not been spent on that day, it accumulates one "Coin Day." To understand the concept of "Coin Day" better, check the examples below.
  • A UTXO for 1 BTC that has not been spent for 10-days has accumulated 10 coin days.
  • A UTXO for 0.5 BTC that has not been spent for 100-days has accumulated 50 coin days.
  • A UTXO for 8 BTC that has not been spent for 6-hours (1/4 day) has accumulated 2 coin days.
When that coin is spent, the coin is considered "destroyed," and is being updated on CDD metric.
  • CDD: An indicator reflects market participants who have been in the bitcoin on-chain for longer.
  • Supply Adjusted CDD: Normalized CDD by supply total.
  • Average Supply Adjusted CDD: Average value of Supply-Adjusted CDD since genesis block.
  • Binary CDD: Signal whether the current Supply-Adjusted CDD is larger than its average or not.

Link to Our Data

Last modified 11d ago