BTC has a lot of ground to cover this year, despite achieving a gain of over 550 percent, according to the on-chain data. What is the reason behind it? To sum it up, there is one word: Coin Days Destroyed (Coin Days Destroyed)
BTC still hasn’t peaked this year
Based on the current coin price, we can analyze Coin Days Destroyed to get a visual sense of the confidence of long-term BTC holders.
The following article will introduce Coin Days Destroyed and how it works.
What is a coin day?
Coin days are the number of days that BTC is transferred from one wallet to another. The logic behind coin days is to gain higher value by selling long term holdings of tokens. Why is this done? Because long-term BTC holders have a deeper understanding of market cycle fluctuations and are therefore better at determining the best time to buy or sell.
As a result, when long-term holders sell BTC, the coin-day destruction value will spike to a higher level. When these holders take a firm position, the Coin Day Destruction value will drop, indicating confidence in a new bull market.
What is Coin Day Destruction?
Coin day destruction is a term that refers to the sudden sale of BTC that has been sitting in your wallet, resulting in the destruction of coin days. The important thing is that these BTC are not actually destroyed. The number of coin days destroyed is simply a measure of the number of days a token was held before it was sold.
For example, let’s say an investor buys 1 BTC and keeps it in his wallet for 90 days, then sees the price rise dramatically and decides to sell, which means 90 coin days are destroyed.
Investors who keep hoarding coins and have only sold a small number of previous tokens will see a downward trend in the number of coin days destroyed. Later in a bull market, people usually sell more and more of their token holdings, which will cause the number of coin days destroyed to rise.
The beauty of this value is that it has less of an impact on short term traders. Compared to the activity of long term traders, these traders will have the least impact on the coin day destruction count since they have not held BTC for very long.
However, when long-term holders start selling BTC, you want to pay attention to this trend.
Looking at these important indicators, it appears that BTC is far from peaking. btc is currently priced at over $40,000, but the 90-day moving average of the coin-day destruction count is near its most
Low level, as shown in the following figure.
The number of coin days destroyed is gradually decreasing, and long-term holders are more confident now compared to when the price of the coin was rising.
How to calculate the coin day destruction number?
The calculation of the coin day destruction count involves two elements.
- First, you need to know the amount of BTC in a transaction.
- Multiply that quantity with the date of the BTC position.
Once a transaction is completed, a certain number of coin days are destroyed, which also means that if the token is held for a longer period of time, more coin days are destroyed.
The chart below shows the power of long-term holders versus short-term speculators.
Currently, the number of coin days destroyed is much lower than the highest value in 2017, so this means that fewer long-term holders are selling BTC compared to previous bull cycles.
It has been 12 years since the birth of the BTC network, and the current appreciation of BTC compared to the past suggests that long-term holders will not sell their assets and that the current BTC price is still a long way from topping out.
In addition, for long-term holders, institutional investors have recently generated higher demand for BTC, which has boosted long-term confidence among holders.
In April, for institutional clients, Fidelity Investments, which manages $10.3 trillion in assets, launched the Sherlock Analytics platform, which provides on-chain BTC data visualization services. Wells Fargo is also poised to invest in BTC, announcing that it will offer an actively managed cryptocurrency product.
These moves by prominent asset managers show the future growth potential of BTC and prove that institutional investors are very much in favor of BTC.
The content of this article is from BitcoinMagazine
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/with-so-many-adjustments-has-btc-still-not-peaked-this-year/
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