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Definition: Binary CDD & Supply Adjusted CDD

Binary Coin Days Destroyed is binary value and if Supply Adjusted Coin Days Destroyed is larger than average Supply Adjusted Coin Days Destroyed, Binary Coin Days points to ‘1’ and points to ‘0’ if not. Let’s look into the Binary Coin Days Destroyed (CDD) values:
  • shows 1: If measured Supply-Adjusted CDD is larger than the average Supply Adjusted CDD
  • shows 0: If measured Supply-Adjusted CDD is less than the average Supply Adjusted CDD

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Interpretation

It shows whether long-term holders’ movements are higher or lower than average CDD.
  • High density of value pointing ‘1’: Long-term holders moved their coins for possible selling
  • Low density of value pointing ‘1’ : Long-term holders are not moving their coins

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How is Binary CDD Measured?

Binary Coin Days Destroyed (Binary CDD) provides a nuanced perspective by evaluating Supply Adjusted Coin Days Destroyed (Supply-Adjusted CDD) against the historical average. This measurement considers the spending behavior of long-term holders, particularly with older coins, and aims to accurately represent economic activity within a cryptocurrency network. By assessing the CDD indicator in relation to the long-term historical average, Binary CDD gives more weight to extended periods of coin holding, often associated with cold storage or long-term investment strategies. This approach helps identify significant relative movements in on-chain activity, offering insights into market strength and potential smart money actions. The binary assessment serves as a valuable tool for understanding long-term holder behavior, shedding light on shifts in market sentiment and providing a timely indication of potential trends based on historical data and moving averages. coins held.

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Straightforward User Guide

Binary CDD serves as a valuable tool for understanding the patterns and long term holder spending behavior in the cryptocurrency market. Generally, when the market is bullish, LTHs tend to spend their older coins, taking advantage of the market strength and positive trend and resulting in higher-than-average destruction of coin days. Conversely, during bearish trends, on-chain activity decreases, and off-chain exchange volumes become more dominant. In such periods, long-term investors with old coins, and savvy holders often accumulate inexpensive coins, withdrawing them to cold storage. This results in a reduction of coin days being destroyed compared to the average. Evaluating Binary CDD is most effective when considering the prevailing market trend. In bullish markets, Binary CDD often remains consistently at 1, reflecting higher on-chain volumes and the spending of older coins. In contrast, bearish markets exhibit a ‘bar-code’ style pattern in Binary CDD, with alternating 0 and 1 values, showcasing variable on-chain volumes and coin day lifespans, but with a higher proportion of below-average coin day destruction.