Bitcoin Coin Days Destroyed
Also known as Bitcoin Days Destroyed (BDD) is a metric that offers information that can be instrumental in forecasting bullish market periods.
This metric aims to quantify Bitcoin activity by merging the number of coins moved and the time they have remained inactive.
In essence, CDD measures the depletion of "coin days" with each transaction, operating under the premise that the longer coins remain idle, the greater their value in terms of accumulated "coin days."
The Coin Days Destroyed calculation involves multiplying two key components: the number of bitcoin being transferred (coins moved) and the number of days these coins have been idle prior to the transaction.
This process provides a nuanced understanding of the cryptocurrency ecosystem, reflecting the dynamics between transaction volume and the temporal aspect of currency downtime.
CDD Terminal Adjusted
An improvement to this metric involves introducing a weighting factor based on the relationship between the current supply of bitcoin in circulation (CurrentSupply) and the maximum potential supply of BTC (TotalSupply).
This adjustment is further refined by applying a 90-day moving average (90-day MA) to both CurrentSupply and TotalSupply.
The addition of the 90-day moving average serves a dual purpose: it smoothes out daily fluctuations and accentuates long-term trends, culminating in the BDD terminal-adjusted 90-day MA indicator.
By incorporating this weighted approach, the Coin Days Destroyed metric becomes more robust and reflects sustained trends in Bitcoin activity.
The BDD Terminal Adjusted 90-Day MA Indicator is valuable in discerning overall market dynamics, allowing analysts and investors to gain deeper insight into cryptocurrency behavior.
This sophisticated metric thus becomes a valuable tool for anticipating the peak of bullish periods, contributing to a more informed decision-making process within the dynamic realm of Bitcoin investment.