CDD, or Coin Days Destroyed, is a measure of Bitcoin transaction activity. It is calculated based on Bitcoin’s age (how long it has been held) and transaction volume per transaction per day. Simply put, it is equal to the sum of the coin ages of all active Bitcoins per day. CDD can reflect the status of Bitcoin that has not been used for a long time.

Formula Specific Factor

CDD = Transaction Volume × Coin Age

• Transaction Volume = Number of Bitcoin transactions in a specific transaction
• Coin age = How long a Bitcoin has been held/unspent before being traded (measured in days)

Specific analysis purposes

CDD

The CDD indicator can be used to measure Bitcoin's liquidity and market participation, and reflect macro market trends. CDD is calculated based on the holding time of Bitcoin, which can be used to reflect changes in the behavior of long-term holders. It is therefore considered an important tool for assessing the spending behavior of Whale and long-term investors.

• When CDD values are high, it indicates increased trading activity in Bitcoin. There is a large amount of Bitcoin that has been inactive for a long time flowing into the market (which can also be understood as a large number of long-term holders trading in a short period of time). Capital flows and transactions in the market are frequent, and short-term price fluctuations are large. Historically, this has typically occurred during bull markets.
• When the CDD value is low, it indicates that Bitcoin trading activity has decreased and the market is more stable. Investors prefer to hold Bitcoin for the long term rather than buying and selling it. Therefore, the price changes of Bitcoin will be relatively small at this stage. This situation usually occurs during bear markets or price correction cycles.

It is evident from the chart below that CDD has continued to move higher from October to November 21, with the market in a bull cycle and gradually approaching the top.

Liveliness

Liveliness is also a measured asset Indicators of holder behavior and activity. It is based on the CDD calculation and can be used to evaluate the holdings and trading behavior of long-term holders of crypto assets. Since Liveliness is calculated by comparing the cumulative CDD of an asset with the cumulative total supply of the market, it can more clearly reflect the large cyclical changes in the market. Unlike CDD, which is calculated on a daily basis, Liveliness reflects macro market conditions within a period of time.

Formula specific factor

Liveliness = Cumulative CDD / Cumulative Total Supply = Volume * Lifespan (of all outputs ever spent) / Volume * Lifespan (of all outputs ever created)

Cumulative CDD = Asset accumulation in the most recent period CDD = Transaction volume * Coin age (the age of all Bitcoins with trading activity in the market)

Cumulative Total Supply = Cumulative asset supply in the most recent period Coin age = Transaction volume * Coin age (coin age of all existing Bitcoins in the market)

Specific analysis purpose

The Liveliness indicator can help investors understand the behavioral patterns of Bitcoin holders. It reflects the trading status and liquidity of Bitcoin within a certain period of time. Liveliness values usually vary between 1 and 0.

• When the Liveliness value is low, it means that most holders choose to hold Bitcoin for a long time without conducting transactions, and the activity on the chain is low. The market is relatively stable.
• When the Liveliness value is high, it indicates that a large number of Bitcoins were traded in a short period of time and the market activity is high.
• When Liveliness is trending upward, it indicates that on-chain activity is increasing. A large number of dormant tokens have returned to the market, thus increasing the liquidity of the market. This situation usually corresponds to a bull market.
• When Liveliness is trending downward, it indicates that the activity on the chain is decreasing. A large number of tokens went dormant, reducing the liquidity of the market. This situation usually corresponds to a bear market.

Historically, Bitcoin Liveliness has clearly reflected market cycles. For example, in early '21, the market experienced a brief bull run. Bitcoin Liveliness showed an upward trend during this period, and activity on the asset chain increased significantly.