Bitcoin Whales Refuse to Sell: Historic Signal Emerges As Binance CDD Drops To 2017 Levels

Overview

Bitcoin has recently retraced below the $91,000 level following a decision by the Federal Reserve to cut interest rates. While this move initially caused volatility across risk assets, on-chain data reveals a notable trend among long-term holders that contrasts with the short-term market sentiment.

Bitcoin’s Market Reaction

The Federal Reserve’s decision to reduce interest rates by 25 basis points has impacted the market, leading to a bearish reaction in the short term. Bitcoin, in particular, has seen a price decline, dropping below the $91,000 mark. This decline, however, is juxtaposed against significant insights derived from on-chain data.

According to CryptoQuant, the Exchange Inflow Coin Days Destroyed (CDD) metric on Binance has sharply decreased to 380, marking its lowest level since September 2017. The CDD metric is crucial for understanding the behavior of long-term holders, as it assigns greater weight to older coins that have accumulated more “coin days.” A low CDD indicates that the Bitcoin moving onto exchanges is primarily from short-term traders rather than long-term holders. This suggests that veteran investors, who have historically influenced market movements, are currently opting not to sell their holdings, even as Bitcoin approaches cycle highs.

Long-Term Holders Signal Strong Conviction

The significance of the declining CDD becomes clearer when placed within the context of Bitcoin’s current price. As Bitcoin trades around $89,600, there is a noticeable divergence between its price action and the behavior of long-term holders. Typically, when Bitcoin nears or surpasses all-time highs, older coins are moved, resulting in increased CDD as early investors and whales take profits. This pattern has been observed in past cycles, where elevated CDD has signaled market tops.

In stark contrast, the current decrease in CDD indicates that very few long-held coins are entering exchanges. This phenomenon suggests that smart money and long-term whales are showing no interest in selling at these price levels, despite a multi-month correction. Their reluctance to distribute supply eliminates a significant source of overhead resistance and reflects a market increasingly supported by strong hands. The lack of long-term sell pressure reduces the available liquid supply, often setting the stage for potential bullish expansions.

Bitcoin Price Action: Testing Support Amid Weak Momentum

Bitcoin’s 3-day chart reveals a market stabilization just above the $90,000 level after a sharp decline following the Fed’s announcement. The cryptocurrency is currently caught between the 200-day moving average, which serves as primary support, and the 100-day moving average, which is capping upward momentum. This creates a classic squeeze structure, indicating that while Bitcoin is holding its ground, it struggles to reclaim lost trend levels.

Recent price action has shown a series of higher lows forming in the $89K–$90K range, suggesting that buyers are defending this area as a short-term support zone. However, the rejection from the 100-day moving average reinforces a broader bearish sentiment, as Bitcoin remains below both key trend indicators and has yet to reclaim the breakdown level around $100K.

Volume analysis indicates that, despite a rebound, the buy-side conviction appears weak, as the increase in price has not been accompanied by a spike in demand. If Bitcoin fails to maintain the 200-day moving average, the next significant support level is closer to $84K, which could lead to a deeper retracement. Conversely, a decisive close above the 100-day moving average near $98K would indicate a return of bullish momentum.

From author

The current market dynamics surrounding Bitcoin illustrate a complex interplay between short-term volatility and long-term holder behavior. The refusal of whales to sell amidst price fluctuations underscores a potential shift in market sentiment that could influence future price movements.

Impact on the crypto market

• The significant drop in Exchange Inflow CDD suggests strong conviction among long-term holders, potentially stabilizing the market.
• The current price action indicates a fragile consolidation phase, with limited directional strength.
• The absence of long-term selling pressure could lead to reduced overhead resistance, fostering conditions for bullish movements.
• The interplay between key moving averages highlights critical support and resistance levels that will shape Bitcoin’s near-term trajectory.
• Market participants remain cautious following macroeconomic uncertainties, which may temper demand in the short term.