Indicator Overview

The indicator is Liveliness. It measures Bitcoin's economic activity by comparing Coin Days Destroyed (CDD) to Coin Days Created (CDC). It is calculated as the ratio of Cumulative CDD to Cumulative CDC (which is essentially the total money supply).

This metric quantifies the overall holding behaviour of the Bitcoin network. It reflects the relative balance between dormancy (coins sitting unspent) and distribution (old coins being moved).

Increasing Liveliness means more CDD is occurring relative to new CDC. This signals a phase of Distribution, where long-term holders are spending old coins.

Decreasing Liveliness means more new CDC is occurring relative to CDD. This signals a phase of Accumulation, where long-term holders are letting their coins sit unspent, leading to increased dormancy.

How To Use

Liveliness is a long-term cyclical indicator used to identify major market accumulation and distribution phases.

When Liveliness is trending lower, it indicates that the rate of coins becoming dormant (accumulation) is overpowering the rate of coins being sold (distribution). This trend is characteristic of bear market bottoms and early bull markets, signifying a collective investor preference for holding.

When Liveliness is trending higher, it indicates that the rate of long-term holder distribution is outpacing the rate of dormancy. This trend is characteristic of major market tops and late bull markets, suggesting that strong hands are spending their coins into market strength.

The crossover from an upward-trending Liveliness to a downward-trending Liveliness often marks a powerful shift from market top distribution into a new accumulation phase, and vice-versa.