A metric worth looking to

There was a pullback in BTC and the broader crypto market on Tuesday, seemingly out of nowhere. But these kind of movements in the market can often be explained by on-chain data. In this case, Coin Days Destroyed is a metric worth looking to explain this.

Crypto intelligence provider Glassnode calculates Coin Days Destroyed for any given transaction by taking the number of coins in a transaction and multiplying it by the number of days it has been since those coins were last spent. In the early afternoon on October 12th this metric spiked, reaching its highest tally since September 26th.

This means that coins from longer-term holders were transacted, which is generally regarded as a bearish move. When these types of investors move their coins, it is often assumed it is to take profits, resulting in pressure on the Bitcoin price. In fact, shortly after this metric spiked that day, we saw Bitcoin’s price tumble from around $57,000 to $55,000, suggesting this may have been due to longer-held BTC being sold. So next time we see a spike in this metric, traders may want to be cautious in the near-term.

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