Coin Days Destroyed (CDD)

What is it?

Coin Days Destroyed (CDD) is a metric in the world of cryptocurrencies that assesses the number of "coin days," which refers to the days a cryptocurrency has been held without being spent. One "coin day" represents one day in which a coin has not been spent. This metric places greater emphasis on evaluating the positions of long-term holders (LTH). When a coin is spent, the number of "coin days" it has accumulated is considered "destroyed."

How does it work?

Coin Days Destroyed is calculated by multiplying the number of days since the last coin was spent by the number of coins spent in a transaction. For example, if 10 coins that have not been spent for 100 days are spent, the resulting CDD value will be 1000 coin days destroyed.

Why is it important for cryptocurrency traders?

Advantages
The CDD metric can be useful in identifying trends among long-term investors. High CDD values may indicate that long-term holders are starting to spend their coins, which can signal changes in the market.

Impact on the cryptocurrency market
Analyzing CDD can help traders understand market sentiments, especially in the context of actions by large and experienced investors. If a large amount of CDD accumulates over a short period, it may suggest that long-term investors are losing faith in further price growth, which can lead to short-term price declines.

Warnings
While high CDD values may suggest selling by long-term holders, it's important not to base trading decisions solely on this single metric. CDD should be considered in conjunction with other indicators and the market context.


Coin Days Destroyed provides insight into how long coins have been held before being spent, which can provide valuable information about investor behavior and the overall market condition. Understanding this metric can be a valuable tool in the hands of an experienced cryptocurrency trader.

Updated on: 12/11/2023