According to this on-chain indicator, an analyst explained how the next potential local top for Bitcoin could be $89,200.
Bitcoin CVDD “Assessing Tops” Metric Could Suggest Next Potential Top
In a new on X, analyst Ali Martinez has talked about where the next top for BTC could be based on the Cumulative Value Days Destroyed (CVDD). The CVDD is an on-chain metric derived from the “Coin Days Destroyed” (CDD).
A “coin day” is the quantity that 1 BTC accumulates after sitting dormant on the blockchain for 1 day. When a coin that has accumulated a certain number of coin days is moved on the network, the coin days it was carrying naturally reset back to zero and are said to be “destroyed.”
The CDD measures the number of coin days being destroyed across the market on any given day. Since every transaction also carries some USD value based on the price at its time, the CVDD adds another layer of context to the CDD by accounting for the USD value of every coin, breaking dormancy to destroy its coin days.
Unlike the CDD, which tracks only the number of coin days being destroyed on any given day, the CVDD is a cumulative sum of the asset’s history. More formally, the CVDD is calculated as a ratio between the cumulative sum of the value-time destruction on the network divided by the age of the cryptocurrency.
Analyst devised the original CVDD, which has proven remarkably accurate for locating historical bottoms in the asset’s price. In the context of the current topic, though, the “Assessing Tops” modification from CryptoQuant author is of interest.
This indicator combines the 50-day moving average (MA) of the Bitcoin spot price with the CVDD and aims to assess probable points of tops in the asset, as its name suggests.
Now, here is a chart that shows how the value of the Bitcoin Assessing Tops has looked like recently:
From the chart, it’s visible that the Bitcoin spot price had briefly breached the Assessing Tops back in March. When the asset exceeds this indicator, its price is generally overheated and prone to forming tops. It would appear that this had also held up during this recent break, as the asset had shortly reached a top following it.
The Bitcoin Assessing Tops indicator currently has a value of $89,200. While a top may not necessarily form if Bitcoin rises to this level, a peak may indeed at least become close when it does so if this indicator is to go by.
BTC Price
At the time of writing, Bitcoin is trading at around $69,300, down more than 1% over the past week.
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
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Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
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