On-chain data shows that Bitcoin long-term holders are making deposits to exchanges currently, something that could be bearish for the price.

Bitcoin Exchange Inflow CDD Has Spiked Recently

As explained by an analyst in a CryptoQuant Quicktake post, investors have been making deposits to spot exchanges recently. There are two relevant indicators here: the “exchange inflow” and the “exchange reserve.”

The former of these keeps track of the total amount of Bitcoin that the holders are transferring to centralized exchanges, while the latter one measures the total amount sitting in the wallets of these platforms.

When the value of the inflow metric spikes, it means that the investors are moving a large number of coins to the exchanges. As one of the main reasons why holders may make such transfers is for selling-related purposes, this kind of trend can be a sign that selling is occurring.

Since selling activity occurs on the spot exchanges, the quant has restricted the exchange inflow and reserve indicators to track only the data related to the spot platforms.

The analyst has also chosen another modifier on the exchange inflow: the “Coin Days Destroyed” (CDD). In simple terms, what the CDD checks for is the activity of dormant coins in the market.

Tokens that have been sitting in wallets for a long time accumulate a large number of “coin days” (where 1 coin day corresponds to 1 BTC staying still for 1 day) and when these coins finally move, the coin days are reset or “destroyed,” which is the number that the CDD measures. The exchange inflow CDD naturally only keeps track of the coin days being destroyed through transfers to exchanges.

Now, here are the charts that show the trends in the 7-day simple moving average (SMA) value of this Bitcoin indicator and the 14-day SMA exchange reserve:

Bitcoin Exchange Inflow CDD & Exchange Reserve

From the first graph, it’s visible that the Bitcoin exchange inflow CDD has registered a sharp spike recently. This would suggest that a potentially large number of dormant coins have been moved into these platforms.

Usually, the CDD having large values like these can be a sign that the “long-term holders” (LTHs) are on the move. The LTHs (defined as holders carrying their coins since at least six months ago) are the most resolute bunch in the market, so their depositing to exchanges can be something to watch for, as it implies that the market has made even these diamond hands waver.

As is visible from the second chart, the exchange reserve has also gone up alongside this spike in the exchange inflow CDD, suggesting that there haven’t been enough withdrawals to make up for these inflows.

It now remains to be seen what effect these possible selling moves from the LTHs may have on the Bitcoin price in the coming days.

BTC Price

Bitcoin has continued its stagnant price action recently as its price is still trading around the $26,400 mark.

Bitcoin Price Chart