According to recent Coin Days Destroyed (CDD) data, Bitcoin experienced a slight drop in price following the entry of old Bitcoins into exchanges. The movement of these older Bitcoins has caused immediate market reactions, highlighting the sensitive nature of cryptocurrency markets to such activities.
Selling pressure from old #Bitcoin
“After the entry of old Bitcoins, there was a drop in Bitcoin. However, since their quantities are small, this selling pressure cannot last long and the price should recover shortly after the initial impact.” – By @XBTManager
Link 👇… pic.twitter.com/oHhRNiv9VU
— CryptoQuant.com (@cryptoquant_com) July 12, 2024
The CDD data revealed significant movements of old Bitcoins, immediately impacting the market. The breakdown of intraday CDD data indicated that Bitcoins aged between 3 and 5 years accounted for 4% of the movement, those aged 2 to 3 years made up 8%, while Bitcoins aged 12-18 months and 6-12 months constituted 4% and 2%, respectively. Although the quantities are not large, their entry into the market can trigger immediate selling pressure due to their perceived impact.
Analysis of Selling Pressure
The market noticed a noticeable dip after these old Bitcoins were moved to exchanges. Despite the relatively small quantities, their entry can cause short-term selling pressure. This phenomenon is typical when CDD data indicates high values, as it did in this instance. The remaining selling pressure came from intraday traders, who generally have a less significant impact on the market.
Despite the temporary dip caused by the selling pressure from old Bitcoins, the quantities involved suggest that this impact will be short-lived. Market analysts expect that the price of Bitcoin should recover shortly after the initial impact. Evaluating CDD data alongside selling pressure is crucial to understanding these market dynamics and anticipating recovery trends. The market’s sensitivity to the movement of old Bitcoins underscores the importance of closely monitoring such data for more informed trading decisions.
The recent drop in Bitcoin’s price due to old Bitcoins entering the exchange highlights such movements’ immediate but temporary impact. Given the small quantities involved, the selling pressure will unlikely persist, with recovery anticipated shortly. This incident illustrates the importance of evaluating CDD data and its implications for short-term market movements.
