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An indicator on the Bitcoin chain is currently forming a pattern that has previously led to major cryptocurrency sales.
A bitcoin indicator on the chain is currently forming a model that has previously led to major cryptocurrency sales.
As pointed out by an analyst in a CryptoQuant post, the selloff could potentially be even stronger than the one seen in November 2018. A pertinent concept here is a "coin day," which is the amount of 1 btc accumulated after remaining motionless on the chain for 1 day. So, when a token remains dormant for a number of days, it earns days piece of the same quantity.
However, when that piece is eventually moved, his parts days naturally reset to zero, and the parts days he had previously accumulated are said to be destroyed. An indicator called the “Coin Days Destroyed” (CDD) measures the total amount of such coin days being destroyed through transfers on the entire Bitcoin network.
When the term is divided by the total number of coins involved in the transactions, a new measure called "medium dormancy" is obtained. When the fixed-term contract is divided by the total number of coins involved in the transactions, a new measure called "average dormancy" is obtained.
When average dormancy is high, it means that the parts that are currently being moved are on average quite old. On the other hand, low values mean that investors are currently transferring newly acquired coins.
Now, here is a chart that shows the trend in the 100-day simple moving average (SMA) Bitcoin dormancy over the last few years:
The 100-day SMA value of the metric seems to have been quite high in recent days | Source: CryptoQuantThe SMA value of 100 days of the metric seems to have been pretty high in the last few days | Source: CryptoQuant.
The reason for this change is that cryptography procurement is not constant. Rather advance with time.
This makes it easier to compare with previous cycles by taking this adjustment into consideration. This means that the old supply has been observing rising activity recently, suggesting that the long-term holders might be exerting selling pressure on the market.
This means that the former offer has seen an increase in activity recently, suggesting that long-term incumbents could exert sales pressure on the market. Three months after this uptrend started, BTC observed its final leg down of the bear market, during the crash of November 2018.
Three months into this uptrend, the BTC saw its latest bearish market decline in the November 2018 crash. Three months into this uptrend, BTC saw its latest bearish market decline in the November 2018 crash.
If that previous trend is something to go through, then bitcoin might be at risk for another sale soon.
Looks like BTC has declined in the last few days | Source: BTCUSD on TradingView
