The Falling Whale Activity and Coin Days Destroyed (CDD)

The falling whale activity and Coin Days Destroyed (CDD) were both encouraging signs.
There is a chance for a deeper correction, but the worst of the selling might be over.

Bitcoin (BTC) prices fell to $76.6k on March 11 before seeing a bounce. At press time, the price was $82.8k, an 8.2% bounce in just over 24 hours. The downtrend was strong, and whether this was the final dip was unclear.

Trying to catch falling knives is a pointless exercise; it’s better to pick them up after they hit the floor. Yet, understanding how far the price is from the floor can be helpful, and metrics can shed some light on this.

Short-term BTC Holder Losses Similar to Consolidation Conditions

The behavior of whales provides insights into the potential movement of BTC since these wallets can greatly influence the market. Analyst Darkfost noted that Binance, the largest crypto exchange by volume, observed a falling exchange whale ratio.
The Exchange Whale Ratio tracks the proportion of the top 10 inflows relative to total inflows on an exchange. A higher ratio indicates increased whale activity, usually signaling greater selling pressure.

Since November 2024, this metric has been rising but has declined over the past month, offering a glimmer of hope. Despite this, BTC remains 11% below the $92K range lows seen in January.

The STH Realized Profit/Loss Ratio was at -10.9% at press time. This aligns with trends observed during June-August 2024 and August-October 2023, periods when Bitcoin hit new two-month lows before entering a consolidation phase lasting 2 to 3 months.

A similar pattern could unfold this time. While further losses cannot be ruled out, the worst may already be over. Consolidation around the $72K support level over the next three months appears to be a realistic possibility.

The supply-adjusted Coin Days Destroyed (CDD) metric is calculated by multiplying the number of coins by the days since they were last moved. Spikes in this metric indicate that older coins are being sold. The original CDD is adjusted by Bitcoin’s circulating supply.

Since December, the 7-day Moving Average (7DMA) of this metric has consistently made lower highs, indicating a decline in selling activity and reduced movement among older tokens.

This is an encouraging sign, suggesting that accumulation may soon follow. Although sellers remain dominant overall, the most intense phases of selling appear to have passed.