Indicator Overview

The indicator is Normalised Coin Days Destroyed (NCDD). It is a derivative of the classic Coin Days Destroyed (CDD) metric, which measures the volume of coins moved, weighted by how long they were dormant. The key difference is that NCDD is normalized by the total market cap or circulating supply (i.e., it divides CDD by the total coin supply). This normalization is crucial because it accounts for the constantly increasing age and size of the Bitcoin market over time. Normalised CDD effectively measures the relative rate of long-term holder distribution compared to the total size of the economy.

How To Use

Normalised Coin Days Destroyed helps identify periods where the distribution activity of long-term holders is significantly high or low, relative to Bitcoin's entire history and supply.

High spikes in NCDD indicate that old coins are being spent at a rate that is exceptionally high relative to the entire circulating supply. These extreme readings often mark major market tops, as they confirm periods of aggressive profit-taking and distribution by long-term holders into peak demand.

Sustained low readings indicate that the spending of old coins is negligible relative to the total supply. This means long-term investors are holding tightly, which reduces selling pressure and is typical of deep bear market accumulation phases or prolonged periods of price consolidation that occur near cycle bottoms. The indicator is a strong cyclical tool; observing its movement from suppressed lows to dramatic highs helps gauge the market cycle phase.