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.

Related Reading | Bitcoin Slips Below $33k As Exchange Inflows Reach Highest Value Since July 2021

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.

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