Bitcoin HODLers Remain Strong Amidst Rally
The latest on-chain data suggests that Bitcoin long-term holders (HODLers) have remained steadfast and have not sold their holdings despite the recent rally that pushed the price beyond $44,000. Glassnode lead on-chain analyst Checkmate explained in a post on Twitter that these old BTC hands are not selling at levels similar to 2019. The indicator used to gauge this behavior is called the “Value Days Destroyed Multiple,” which is based on the “Coin Days Destroyed” (CDD) metric.
Understanding Coin Days Destroyed (CDD)
In on-chain analysis, a coin day represents the number of days that 1 BTC remains inactive on the blockchain. When a dormant coin is moved, its coin days reset to zero, indicating that the previously accumulated coin days have been “destroyed.” The CDD measures the destruction of coin days happening across the blockchain, indicating when dormant coins have been moved.
HODLers Hold Their Coins
Bitcoin long-term holders typically do not sell even during times of significant profit-taking opportunities. Therefore, it is concerning when these investors decide to sell. The chart displaying the “Value Days Destroyed” (VDD) multiple shows how these HODLers are reacting to the current price rally. The VDD multiple compares the 30-day and 365-day moving averages of Bitcoin VDD and indicates a mildly heated market.
Not Reaching Previous Bull Run Levels
Although there has been some growth in the VDD multiple recently, it has not reached the same values as previous bull runs. The metric has not even hit the levels seen during the recovery rally in April 2019. This suggests that HODLers are demanding higher prices and are not willing to sell their coins at the current levels.
Bitcoin Price
Bitcoin has seen a 14% increase in the past week, with the price hovering around $44,100. The asset’s latest rise has brought it back above the $44,000 level, which coincided with the largest spike in the VDD multiple during the 2021 bull run. This indicates that HODLers are holding onto their coins and waiting for higher prices.
Hot Take: Bitcoin HODLers Show Conviction Despite Rally
The recent rally in Bitcoin’s price has not shaken the conviction of long-term holders. On-chain data suggests that these HODLers are holding onto their coins and are not selling, even as the price surpasses $44,000. This behavior is reflected in the Value Days Destroyed Multiple, which compares the movement of dormant coins on the blockchain. While there has been some activity from HODLers spending more than usual, it is still far from previous bull run levels. This shows that HODLers have strong hands and are demanding higher prices before parting with their coins.
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