Coin Days Destroyed (CDD)

Coin Days Destroyed (CDD) refers to the concept of eliminated or spent coin days. But which coin days are we talking about? After identifying the significance of wallet days for BTCs held for 155 days or more, this type of on-chain data has been deemed crucial in Bitcoin trading.

In essence, if 1BTC is held for one day, it generates one coin day. This coin day is considered spent when the BTC is transferred to another wallet.

For instance:

CDD=(Number of Days Held)×(Amount of BTC Transferred)

12 years = 4380 days

CDD = 4380 x 100 = 438,000 coin days have been destroyed.

The channel through which CDD data arrives is also very important. For example, CDD data coming to a derivatives exchange (a common term for exchanges where leveraged trades are executed) increases the likelihood of taking Long or Short positions. Conversely, if CDD data arrives at a Spot exchange, it most likely indicates an intention to sell.