A large spike in CDD implies long-dormant Bitcoin was moved, with the most recent spike occurring on the 24th of April.
- Bitcoin dominance and a technical indicator suggested it might be time for swing traders to look at altcoins. Relative strength against BTC is an important factor alongside long-term support zones to gauge underperforming altcoins.
Bitcoin [BTC] was trading inside a range within a range. With a short-term bearish bias, Bitcoin and the rest of the crypto market were not attractive to long-term investors.
The market could take a few weeks to consolidate, especially considering the massive gains in the months leading to the halving. This might present a buying opportunity for altcoins that showed strength.
Examining the recent BTC reset
Source: CryptoQuant
Coin days destroyed (CDD) is a metric that measures the age of the coins moved during a transaction. It is calculated by multiplying the number of coins in a transaction by the number of days the coin has not moved.
Hence, a large spike in CDD implies that long-dormant Bitcoin was moved. Long-term holders might choose to book profits during a rally (like it did on the 23rd of March), or after a particularly deep pullback (the 1st of April).
While it is not a crystal ball, it is a useful metric to gauge the HODLer sentiment.
Source: BTC.D on TradingView
The Bitcoin Dominance chart measures the market capitalization of BTC as a percentage of the total crypto market capitalization. It stood at 54.68% at press time and has fallen beneath a former support level.
This zone, highlighted in red, is expected to serve as resistance. Therefore, if the BTC’s dominance resumed its downtrend, it could give altcoins a chance to make gains.
Which altcoin could you focus on?
In a recent post on X, crypto analyst Ali Martinez noted that the TD Sequential Indicator flashed a buy signal for Chainlink [LINK] on the 12-hour chart. Yet, LINK has lost close to 33% since the 26th of March.
In the same period, Bitcoin has lost 12.2%. A sign of strength in an altcoin is when it holds up reasonably well against BTC losses. LINK did not exhibit strength against Bitcoin in the past month.
Source: Hyblock
The liquidation heatmap showed that $16, $18 and $19.5 were the regions with the highest concentration of liquidation levels to the north. This marked them as bullish targets. However, the downtrend was still in play.
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The liquidity at $13.5 and $12.5 was much closer and more likely for LINK prices to reach in the coming weeks.
Therefore, even though BTC Dominance and the TD sequential gave swing traders a reason to go long, the potential for a drop to these support levels must be kept in mind before entering trade positions.
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