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Before yesterday’s plunge, Bitcoin’s recent rally was able to push the asset to a new all-time high of $108,000, marking another major milestone in its upward trajectory.
However, according to the latter analysisThis notable price increase comes with signs of potential market volatility as long-term holders begin to exhibit selling activity.
Attention is focused on the Binary Coin Days Destroyed (CDD) metric, a crucial tool for assessing the long-term behavior of Bitcoin holders.
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What are long-term holders currently signaling?
The Binary CDD metric tracks the activity of long-term holders by measuring the number of “coin days” destroyed relative to the total supply. When this measure spikes, it often signals increased selling pressure from long-term investors.
According to a CryptoQuant analyst, ShayanBTC, the binary CDD metric has recently recorded a sharp increase, coinciding with Bitcoin’s new price high.
Historically, such spikes in this measure have been precursors to market corrections, indicating that these holders are taking advantage of current price levels to reduce their exposure.
Shayan added that the actions of long-term holders often serve as a barometer of broader market sentiment. The recent rise in the binary CDD metric suggests that these holders could view the peak above $108,000 as a strategic exit point.
If this selling pressure increases, it could lead to greater market volatility and possibly a price correction.
Bitcoin Market Outlook
Bitcoin has recorded a rollercoaster move over the past day. Notably, following the outcome of the FOMC news yesterday, along with the speech of Jerome Powell, Chairman of the United States Federal Reserve, Bitcoin saw a significant drop in its price drop to a level of $98,000.
However, the latest price action has been quite interesting as BTC shows a recovery. In the early hours of Thursday, Bitcoin saw a price recovery after clawing back $100,000 to trade above $105,000.
Currently, Bitcoin has seen a return to a price of $100,718, at the time of writing, marking a decline of 3.5% in the past day and a decline of around 6.6% from its all-time high (ATH) .
Meanwhile, another CryptoQuant analyst, Onatt, adds to Shayan’s story: marked additional market indicators pointing to potential turbulence.
The Coinbase Premium Index, which tracks the price difference between Coinbase and other exchanges, is currently in negative territory, indicating increased selling pressure.
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Additionally, the adjusted Spent Output Profit Ratio (aSOPR), a metric used to measure profit-taking behavior, has shown sudden spikes.
According to Onatt, these signals collectively emphasize the need for sustained institutional demand, particularly through Bitcoin Exchange-Traded Funds (ETFs), to stabilize market conditions.
Featured image created with DALL-E, Chart from TradingView