CoinDaysDestroyed_inProfit_STH

Tech spec

Brief Description: Coin Days Destroyed (CDD) for UTXOs spent at a profit (spending price > acquisition price).

CoinDaysDestroyed_inProfit_STH measures the CDD of UTXOs spent at a profit, helping to identify whether profit-taking behavior is dominated by Long-Term Holders (LTH) or Short-Term Holders (STH).

Metric variants

• _lth: CoinDaysDestroyed_inProfit_STH restricted to Long-Term Holders (age ≥ 155 days).
• _sth: CoinDaysDestroyed_inProfit_STH restricted to Short-Term Holders (age < 155 days).
• _non_churn: all spent utxo with a lifespan of less than 1h is excluded from the analysis. It useful to filter out transactions that are not economically meaningful, such as relay transactions and mixer.
• _normalized: normalized by the total Bitcoin supply.

Interpretation CoinDaysDestroyed_inProfit_STH can indicate whether the market realized profit are being spent by speculators (indicating a short term profit taking during rallyes) or experienced investor (indicating a long term profit taking and bullish sentiment during bill market mania). A decreasing CoinDaysDestroyed_inProfit_STH generally indicates the deterioration of bull market conditions and the arrival of bearish sentiment. A increasing CoinDaysDestroyed_inProfit_STH generally indicates that profit taking is accelarating, suggesting positive biais and confident participants.

Advanced Explanation CoinDaysDestroyed_inProfit_STH is reffering the concept of and Coin Days (CD) and Coin Days Destroyed (CDD), originally mentionned on Bitcointalk forum in 20211.

• Coin Days essentially measures the length of detention of a given UTXO. When a UTXO is transferred, the timestamp of the creation of the new UTXO serves as the Day 0 of detention. Then, when this UTXO is spend, the count of accumulated number of days of dentention (Coin Days) is set back to 0.
• Coin Days Destroyed measures the number of Coin Days that were set back to 0 by the spending of the UTXO. This metric helps to identify periods where old coins, often associated with HODLers or Long Term Holders are spent, whick can deliver insights about he market behavior and sentiment.
• CoinDaysDestroyed_inProfit_STH tracks the amount of CDD that were destroyed for every UTXO having a spending price superior to its acquisition price. It can serve to identify the tendency of profit taking to be dominated by Long Term Holders or Short Term Holders.