The price of the leading cryptocurrency Bitcoin (BTC) is down about 1% today, continuing the overall downward trend in December with this movement: BTC has lost 3.6% of its value so far this month. However, two important indicators suggest that selling pressure may ease.
Nevertheless, some analysts say that the buying side strength is still weak and that it limits the likelihood of a significant price increase at least in the short term.
Selling Pressure in Bitcoin is Decreasing According to Main Indicators
According to CryptoQuant data, Bitcoin's Coin Days Destroyed (CDD) indicator has experienced a significant decline. In short, CDD measures how long Bitcoin has been held in a wallet without being spent.
When older coins are moved, more coin days are eliminated: This usually means that long-term investors are selling. High CDD values indicate selling pressure from these investors, while the downward trend shows that long-term holders are maintaining their positions.
Analyst Darkfost stated: ‘It has been over a month since the large BTC transfer out of Coinbase. Therefore, all average data is gradually returning to normal. Looking at the Coin Days Destroyed (CDD) data, a sharp decline is clearly visible after this event. What is particularly noteworthy is that this decrease has even fallen below the previous spike.’
According to the analyst, this change means that the mobility of long-term investors has decreased. Bitcoin is now changing hands between old wallets less frequently. Darkfost also noted that this change could have significant effects on the market.
‘This decline in CDD is a positive signal because long-term investors still hold the largest portion of the total supply and are in the position to cause the most selling pressure.’
The analyst also pointed out that this continuous decline in selling pressure from long-term investors could contribute to the formation of a market bottom by reducing overall market stress if this trend continues.
Another signal is emerging in Bitcoin exchange-traded funds (ETFs). Since the beginning of November, the 30-day moving average of net inflows into Bitcoin ETFs has been below zero, indicating continuous net outflows.
However, the magnitude of these negative indicators is gradually decreasing. The 30-day average has now started to approach zero and indicates that outflows from ETFs have decreased to lower levels.
SoSoValue data also confirms this trend. On December 15, total net outflows were at $357.69 million. On December 16, this figure fell to $277.09 million, and on December 18, it declined to $161.32 million.
Outputs decreased to 158.25 million dollars on December 19 and to 142.19 million dollars on December 22. However, despite the decline in daily figures, we have not yet received confirmation for a clear directional change.
Meanwhile, 10x Research analysts emphasize that market conditions are changing. The team, which has been bearish since October, observes that some changes have started in derivatives, ETFs, and technical indicators.
The 10x Research team's statement included the following: ‘After our bearish outlook, here is the day and exact hour we will buy Bitcoin... The largest Bitcoin options expiration to date is approaching: Strike levels and open positions indicate where stress and opportunities may arise. At the same time, past year-end patterns suggest that reversals in investor sentiment could quickly occur when extreme cautious periods reset their calendars and risk budgets. Technical indicators are also evolving, and a more delicate balance is beginning to form between downward fatigue and upward possibilities.’
Despite all these signals, the demand for purchases for a potential rise must return both stronger and in a more lasting way. According to BeInCrypto, stablecoin reserves on major cryptocurrency exchanges have significantly decreased, with approximately $1.9 billion in capital outflows in the last 30 days.
This decline indicates that the instantaneous purchasing power in the market has decreased and that investors continue to remain cautious. Additionally, CryptoQuant CEO Ki Young Ju stated that the recovery of market sentiment may take several months.
