Bitcoin's cycle structure is under scrutiny due to similarities with historical peaks, as indicated by VDD (Volume-Weighted Density) figures.
In the world of cryptocurrency, the latest surge of Bitcoin has aligned with its push to an all-time high. However, selling pressure is intensifying, as the digital asset currently trades at $112,286, showing a slight recovery after weeks of pressure.
One metric that provides a more nuanced picture of the influence older coins exert on the Bitcoin market is the Value Days Destroyed (VDD). This metric, which tracks the movement of older coins and weighs this activity according to price, has reached a level of 2.4, historically associated with significant selling pressure.
Darkfost, a pseudonymous top analyst at CryptoQuant, suggests that the traditional cycle structure of Bitcoin may still hold. He notes a recent peak in long-term holder activity followed by a cooling off, suggesting easing distribution by these holders. This could provide relief from supply pressure.
Darkfost's insights reveal a maturing Bitcoin market structure with stronger scarcity and accumulation trends, signaling generally bullish long-term market dynamics despite short-term volatility. He also highlights that Bitcoin miners are holding their coins more due to growing institutional adoption and improved market conditions, reducing sell pressure.
However, a breakout above $115K would be needed to shift sentiment and open the way toward retesting the $120K-$123K zone. Without strong inflows and renewed conviction from buyers, the reduction in selling pressure alone may not be enough to spark a sustainable rally.
The 50-day moving average is trending above the current price, acting as near-term resistance around $115K. A renewed upward momentum could be set if demand increases.
Historically, spikes in Coin Days Destroyed (CDD) have aligned with tops and significant corrections. Spikes to this VDD level have often marked moments when long-term holders locked in profits. The easing of selling from long-term holders could offer some relief from supply pressure.
Analysts are divided on whether Bitcoin will correct or consolidate. Regardless, the role of long-term holders continues to play a decisive role in shaping Bitcoin's market direction. The Value Days Destroyed (VDD) metric offers insights into Bitcoin's current market structure, providing a tool for analysts to monitor the balance between buying and selling pressure.
In conclusion, while selling pressure is intensifying on Bitcoin, the easing of selling from long-term holders could offer some relief from supply pressure. A breakout above $115K would be needed to shift sentiment and open the way toward retesting the $120K-$123K zone. The role of long-term holders continues to play a decisive role in shaping Bitcoin's market direction.
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