On-chain data suggests Bitcoin long-term holders have started to capitulate recently as the sharp price drop causes panic in the market.

As pointed out by a CryptoQuant post, the recent price drop has pushed long-term holders towards selling their BTC.

“Coin days” are the number of days a Bitcoin has remained dormant for. An example: if 1 BTC doesn’t move for 5 days, it accumulates 5 coin days.

When such a coin would be transferred or moved, its coin days would be “destroyed” as the number will reset back to zero.

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The “coin days destroyed” (CDD) metric naturally measures how many of these coin days are being destroyed in the entire market at any given time.

A modification of this indicator, called the “Bitcoin exchange inflow CDD,” tells us about only those coin days that were destroyed by a transfer to exchanges.

A high value of the inflow CDD generally suggests that long-term holders (who accumulate a large number of coin days) are moving their coins to exchanges.

Investors usually transfer their Bitcoin to exchanges for selling purposes, so LTHs transferring a large number of their coins can be bearish for the price of the crypto.

Now, here is a chart that shows the trend in the BTC inflow CDD over the past month:

As you can see in the above graph, the Bitcoin exchange inflow CDD has observed some high values over the last few days.

This shows that long-term holders have been selling amid the recent panic in the market due to the price drop from $38k to below $30k.

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The especially large spikes in the last two days suggest LTHs may have started to go through a phase of capitulation.

Since LTHs usually make up the Bitcoin cohort that is the least likely to sell, capitulation from them is a negative sign for the price of the coin.

At the time of writing, Bitcoin’s price floats around $31.6k, down 18% in the last seven days. Over the past month, the crypto has lost 26% in value.

The below chart shows the trend in the price of the coin over the last five days.

Bitcoin’s drop has continued today as the crypto briefly touched below $30k for the first time since July of last year, before rebounding back to the current level.

Bitcoin price in Telegram @btc_price_every_hour

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