A Bullish Breakout Brewing for Bitcoin Binary CDD
On-chain data suggests that a bullish breakout is forming in the Binary Coin Days Destroyed (CDD) indicator for Bitcoin. This pattern has historically been the starting point of a bullish trend.
Understanding Coin Days Destroyed (CDD)
Coin days refer to the accumulation of 1 BTC after staying dormant on the blockchain for a day. When a token that has been dormant moves on the network, its coin days counter resets to zero, indicating that the coin days have been “destroyed.” The CDD measures the total number of coin days being reset through transactions across the network.
The Bitcoin Binary CDD Indicator
The Binary CDD compares the current CDD against its historical average and can only assume values of 0 or 1. A chart depicting the trend in Bitcoin Binary CDD over the years shows spikes in CDD during upward cycles, indicating movement from long-term holders (LTHs).
Long-Term Holders and Market Movement
LTHs are investors who hold large amounts of BTC for extended periods. Increases in CDD signal movement among LTHs. The recent movement of LTHs suggests that the market may be entering a bullish phase similar to previous cycles.
A Breakout from Accumulation Zone
The 182-day moving average of Binary CDD also exhibits a similar pattern. The recent breakout from the accumulation zone could lead to sustained price surges for Bitcoin, signaling the beginning of an upward price cycle.
BTC Price Update
After dipping to $42,200 over the weekend, Bitcoin has rebounded and is now trading above $43,000.
Hot Take: Bitcoin Primed for Bullish Breakout
On-chain data suggests that Bitcoin may be on the brink of a bullish breakout. The Binary CDD indicator, which compares the current CDD against its historical average, is showing signs of a pattern that has historically preceded upward price cycles. Additionally, the movement of long-term holders indicates a potential market shift similar to previous bullish periods. With the recent breakout from the accumulation zone, there is a high possibility of a full-fledged upward price cycle beginning for Bitcoin.
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