Supply Adjusted Coin Days Destroyed (CDD)

Supply Adjusted Coin Days Destroyed (CDD)

"Supply Adjusted Coin Days Destroyed" (CDD adjusted for supply) is a metric that provides a more precise analysis of the age and movement of cryptocurrencies. Traditional CDD counts how many days coins remained inactive before being transacted. For example, if a coin doesn’t move for 10 days and then is transacted, 10 coin days are “destroyed”.

Adjusting the CDD for the total supply of coins means we are considering how much of the total supply is being moved. This is important because a large movement of old coins can have a different impact in a small market compared to a large market.

The "Supply Adjusted CDD" offers a view of the age of the coins moved in relation to the total size of the market. If the adjusted value is high, it means that a significant portion of the total supply is changing hands after a long period of inactivity, which could indicate a change in behavior of long-term holders.

This metric is useful for investors and analysts because it helps to identify behavioral patterns that can influence price and liquidity in the cryptocurrency market. It is a more refined indicator than CDD alone, as it takes into account the broader context of the total supply of coins available.

Therefore, the "Supply Adjusted CDD" provides a clear picture of how old coins are being used, adjusted for the total available supply, allowing for a better understanding of the health and activity of the cryptocurrency market. It helps to reveal whether the movement is part of a trend of consolidation, divestment, or simple redistribution.