The Bitcoin price remains in a fragile phase in its broader market structure, alternating between recovery attempts and lingering macro uncertainty. Structurally, the market is in a state of transition, as it exits euphoric expansion but is not yet completely in capitulation.
Ultimately, current price action reflects a tug-of-war between long-term conviction holders and short-term speculative flows. Nonetheless, on-chain data suggests that the top cryptocurrency is likely to embark on more downward journeys.
CVDD: Bitcoin’s compass hits its lowest level since 2012
In a recent article on Platform
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Launched by Satoshi Nakamoto in 2009, CVDD is a long-term Bitcoin valuation metric designed to identify major market bottoms by analyzing long-term holder behavior. To understand CVDD, one must recognize Coin Days Destroyed (CDD).
CDD corresponds to each accumulated Bitcoin that remains unchanged in a wallet. Now, CVDD tracks the cumulative historical value of days of coins destroyed and adjusts it in a valuation model to produce a price level that historically aligns with the major bottom of the Bitcoin cycle.
Since 2012, CVDD has consistently marked Bitcoin price lows with remarkable accuracy. The model basically measures when the oldest, long-held coins are spent. Because long-term holders tend to distribute near cycle peaks and accumulate during deep bear phases.
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Over time, CVDD has acted as a floor under the price during sharp declines. During previous cycles, including the 2015 bear market bottom, the 2018 capitulation, and the 2022 sell-off, the Bitcoin price often approached or briefly fell below the CVDD line before staging a long-term recovery.
Currently, CVDD sits at $45,225, a level that represents what many would consider a deep value zone within the current market structure. This does not necessarily imply that prices need to fall to this level, but rather that it constitutes historically significant structural support if overall market conditions deteriorate further..
When BTC trades comfortably above CVDD, it generally indicates that the market remains in a healthier macroeconomic position. Meanwhile, when the Bitcoin price tightens, sentiment often turns pessimistic and long-term accumulation tends to intensify.
As Bitcoin consolidates within its current range, it might be worth checking if the price maintains sufficient distance above the $45,225 CVDD level. A decisive move towards this level could signal greater corrective pressure, while sustained strength above this level strengthens the argument that the cycle as a whole remains structurally intact.
As of this writing, BTC is valued at around $70,000, reflecting a modest price increase of almost 2% over the past day.
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Featured image from iStock, chart from TradingView
