The price of Bitcoin (BTC) has fallen again today by about 1%, extending the overall decline of 3.6% this month. However, currently, two key indicators suggest that selling pressure is easing.
In contrast, some analysts warn that buying pressure remains weak and that the potential for a strong price increase in the short term is limited.
Key indicators, reduced Bitcoin selling pressure
According to data from the on-chain cryptocurrency platform CryptoQuant, the Coin Days Destroyed (CDD) metric for Bitcoin has significantly decreased. For reference, CDD is a measure that tracks how long Bitcoin has been held before being moved.
Whenever old coins are moved, more coin days are burned, which usually indicates the distribution of long-term holders. A high CDD value suggests selling pressure from these investors, while a low value indicates that long-term holders are not moving.
“It has been over a month since a large-scale Bitcoin move occurred on Coinbase. As a result, all average data is gradually returning to normal levels. Looking at the Coin Days Destroyed (CDD), a sharp decline is clearly observed after this event. In particular, this decline shows that we have reached a much lower level than the previous spike.” – Analyst from Darkfost
According to analysts, this change indicates that the movements of long-term holders (LTH) are slowing down. Bitcoin is not moving as frequently among old wallets as it used to. Darkfost added that this change could also impact the overall market.
“A decrease in CDD is a positive signal. Long-term holders (LTH) still constitute the largest proportion of the total supply, potentially becoming the strongest source of selling pressure.”
The analyst emphasized that if the selling pressure from long-term holders continues to weaken, the overall burden on the market will decrease, and if this trend continues, it could contribute to the formation of a market bottom.
Another signal is being captured in the flow of Bitcoin exchange-traded funds (ETFs). Since early November, the 30-day moving average of net inflows into Bitcoin ETFs has remained negative, with continuous net outflows occurring.
However, the scale of this negative figure is gradually shrinking. The 30D-SMA is currently approaching zero, suggesting that the scale of net outflows from ETFs is decreasing compared to the past.
Data from SoSoValue also shows this. As of December 15, total net outflows reached $357.69 million. On December 16, it decreased to $277.09 million, and on December 18, it further reduced to $161.32 million.
On December 19, the net outflow was $158.25 million, and on December 22, it further decreased to $142.19 million. However, even though the daily figures decreased, a clear directional reversal has not been confirmed.
Meanwhile, analysts from 10x Research point out that the market conditions are changing. This company, which has been forecasting a downturn since October, explains that it has been observing changes in derivative products, ETFs, and technical signals.
“We, who anticipated a downturn, plan to buy Bitcoin from this day and this moment. Currently, the largest Bitcoin options expiration is approaching. The price levels of derivatives and open interest indicate where market stress and opportunities are arising. At the same time, looking at year-end patterns suggests that the extremely conservative atmosphere could change rapidly with the new year and risk budget resets. Technical aspects are also changing gradually, indicating that the balance between the exhaustion of the downtrend and upward optionality is becoming more delicate.” – Official post from 10x Research
Despite these signals, a more robust and sustained recovery in demand is needed for a meaningful uptrend to appear. BeInCrypto reported that the stablecoin holdings of major exchanges have decreased by approximately $1.9 billion over the last 30 days, indicating that funds are flowing out.
This decrease signifies a reduction in immediate buying power and shows that market participants are still maintaining a cautious attitude. Additionally, Ki-young Ju, CEO of CryptoQuant, mentioned that it could take months for market sentiment to recover.
