Bitcoin (BTC) price has fallen nearly 1% again today, extending the broader decline that has led to a drop of 3.6% so far this month. However, two key indicators now suggest that selling pressure is beginning to ease.
However, some experts warn that purchasing power remains weak, which limits the opportunities for a significant price increase, at least in the short term.
Key indicators show reduced selling pressure on Bitcoin
According to data from CryptoQuant, Bitcoin's Coin Days Destroyed (CDD) has shown a significant decline. In comparison, CDD measures how long Bitcoin remains unused before it is moved.
When older coins are transferred, more coin days are destroyed, which often signals distribution from long-term holders. High CDD levels are typically associated with selling pressure from these investors, while lower values suggest that long-term holders are holding onto their assets.
“We are now over a month past the large BTC transfer from Coinbase. As a result, all average data is gradually returning to normal levels. Looking at Coin Days Destroyed (CDD), we can clearly observe a sharp decline following this event. What is particularly interesting is that this decline has reached a level well below the previous peak,” wrote Darkfost.
According to the expert, this shift indicates that activity among long-term owners is cooling. Bitcoin is changing hands less frequently between older wallets. Darkfost added that this could have broader implications for the market.
“This decline in CDD is a positive signal, as LTHs still represent the largest potential source of selling pressure because they hold the largest share of the total supply.”
The expert also emphasized that the persistent decline in selling pressure from long-term holders helps to alleviate overall market pressure and, if the trend continues, could contribute to the formation of a bottom in the market.
Another sign comes from Bitcoin exchange-traded fund (ETF) inflows. Since early November, the rolling 30-day average (30D-SMA) of net inflows to Bitcoin ETFs has been negative, reflecting persistent net outflows.
However, the extent of these negative values has gradually diminished. The 30D-SMA is now approaching zero, suggesting a decline in ETF outflows compared to previous levels.
Figures from SoSoValue also reflect this trend. On December 15, total net outflows reached $357.69 million. This figure fell to $277.09 million on December 16 and $161.32 million on December 18.
Outflows continued to decline to $158.25 million on December 19 and $142.19 million on December 22. It is, however, worth noting that although the daily figures have decreased, this does not confirm a clear directional shift.
Meanwhile, experts at 10x Research point out that market conditions are changing. The firm, which has been bearish since October, observes that changes are underway in derivatives, ETFs, and technical indicators.
“After being bearish, this is the day, and the exact moment, we will buy Bitcoin. The largest outflow of Bitcoin options ever is approaching, where strike prices and open interest indicate where stress and opportunities may increase. At the same time, previous year-end patterns suggest that periods of extreme caution may quietly give way to significant sentiment shifts as calendars and risk budgets reset. Technical conditions are also evolving, indicating that the balance between exhaustion on the downside and upside opportunities is becoming more nuanced,” the post states.
Despite these signals, a potential increase will likely require stronger and more consistent demand. BeInCrypto reported that stablecoin reserves on major exchanges have fallen significantly, with capital outflows of nearly $1.9 billion in the last 30 days.
This suggests lower immediate purchasing power and continued caution among market participants. Additionally, CryptoQuant CEO Ki Young Ju noted that an increase in market sentiment may take several months to develop.
