Short-Term CDD
Short-Term Holder Coin Days Destroyed (STH CDD) Indicator
The Short-Term Holder Coin Days Destroyed (STH CDD) is an on-chain metric that measures the activity of short-term holders (STH) by calculating the total "coin days destroyed" when their coins are moved. A "coin day" represents one coin held for one day without being moved. This metric is particularly useful for understanding speculative behavior, short-term market sentiment, and potential distribution phases.
Steps to Use the STH CDD Metric
1. Understand the Concept
STH CDD: The sum of coin days destroyed by short-term holders over a given period:
Short-Term Holders (STH): Entities holding coins for a short duration, often associated with speculative behavior and rapid market responses.
Relevance: Highlights the activity of short-term holders, offering insights into their behavior, including profit-taking, speculative trades, or panic selling.
2. Interpret the STH CDD Metric
High STH CDD: Indicates significant movement of coins held for a short duration, often reflecting speculative selling or profit-taking.
Low STH CDD: Suggests minimal activity by short-term holders, reflecting reduced speculative activity or market calm.
Stable STH CDD: Reflects consistent behavior by short-term holders, often observed during periods of market equilibrium.
3. Analyze Historical Patterns
Bull Markets: Spikes in STH CDD align with profit-taking or speculative activity as short-term holders capitalize on price increases.
Bear Markets: Low STH CDD indicates reduced activity or accumulation as speculative behavior diminishes.
Neutral Markets: Stable STH CDD values suggest balanced activity, reflecting neutral sentiment among short-term holders.
4. Make Decisions
During Bull Markets: Monitor rising STH CDD values for signs of speculative selling or profit-taking, signaling potential resistance levels or market tops.
During Bear Markets: Use low STH CDD values to identify periods of reduced speculative activity or potential accumulation opportunities.
During Neutral Markets: Observe stable STH CDD values to gauge short-term sentiment and prepare for potential directional moves.
Tips:
Combine with Other Metrics:
Use STH CDD alongside metrics like LTH CDD, Dormancy Flow, and Spent Output Age Bands to gain a comprehensive view of holder behavior and market sentiment.
Track Speculative Behavior:
High STH CDD values during bull markets signal speculative activity, often aligning with volatility and profit-taking behavior.
Compare Historical Trends:
Analyze STH CDD trends across previous market cycles to identify recurring patterns and align strategies with historical data.
Assess Market Sentiment:
Rising STH CDD reflects increased speculative activity, while declines indicate reduced short-term holder engagement.
Monitor Market Calm:
Low STH CDD values during bearish phases may signal reduced speculative interest, aligning with market stabilization or accumulation.
How to Use the Indicator Effectively
During Market Rallies: High STH CDD values reflect profit-taking or speculative selling, signaling confidence but also potential resistance levels.
During Market Corrections: Low STH CDD values indicate reduced activity among short-term holders, often aligning with accumulation phases and market bottoms.
During Consolidation Phases: Stable STH CDD values reflect balanced activity, supporting long-term planning and strategic positioning.
Created By: This indicator is a widely recognized tool in blockchain analytics.
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