Bitcoin's Short-Term Risks Amid Record Whale Profits and CDD Spikes

The recent surge in Bitcoin’s on-chain activity has created a paradox for investors: record whale profits and elevated Coin Days Destroyed (CDD) metrics coexist with a resilient price action. This tension between bearish distribution signals and bullish structural demand underscores the need for strategic caution.

In early July, a historic CDD spike occurred as 80,000 dormant BTC—valued at over $8 billion—were moved from wallets inactive since 2011 [4]. Such movements, historically linked to major price corrections [4], initially raised alarms. Yet Bitcoin’s price remained stable, trading between $116,000 and $120,000 [5]. This divergence suggests that while long-term holders (LTHs) may be taking profits, structural demand—such as Bitcoin ETF inflows—has absorbed much of the selling pressure [3].

However, the risks of short-term volatility persist. The 30-day moving average of CDD surged to 1.35 million in late July [1], reflecting heightened activity from LTHs. While this metric has since declined, the initial spike indicates a phase of market distribution, where older coins are being liquidated. The Monthly CDD to Yearly CDD ratio, at an unusually high 0.25 [3], further reinforces this narrative. Historically, such ratios have signaled bearish phases, as LTHs shift from accumulation to distribution.

The market’s resilience, however, cannot be ignored. Binary CDD—a measure of smaller, more frequent transactions—has cooled after a brief uptick [2], suggesting a gradual, stair-step rally pattern. This aligns with broader on-chain data: CDD reached 28 million, and Bitcoin’s Net Realized Profit and Loss (NRPL) climbed past $4 billion [5], indicating robust profit-taking by whales and retail buyers. Yet the absence of a sharp price drop implies that demand remains strong enough to counterbalance selling pressure.

For strategic investors, the key lies in balancing these conflicting signals. While the CDD spikes and LTH distribution suggest short-term risks, the broader accumulation trend—evidenced by declining CDD in August [1]—points to a market still in a bullish phase. The critical question is whether structural demand can sustain this equilibrium as more LTHs re-enter the market.

In conclusion, Bitcoin’s on-chain data paints a nuanced picture. Investors must remain vigilant to the risks of profit-taking and potential short-term corrections, even as the long-term fundamentals—backed by ETF inflows and robust NRPL—suggest continued upward momentum. The path forward will require a careful assessment of both on-chain signals and macroeconomic factors, with patience and discipline as essential tools.

Source:[1] Bitcoin 30-Day CDD Down: Market Absorbs LTH Selling [https://www.mitrade.com/insights/news/live-news/article-3-1045864-20250817][2] Bitcoin's Binary CDD Decline Suggests Gradual Rally [https://www.bitget.com/news/detail/12560604908993][3] Bitcoin LTHs Start Distributing: CDD Ratio Hits Historic [https://www.tradingview.com/news/newsbtc:ff3590356094b:0-bitcoin-lths-start-distributing-cdd-ratio-hits-historic-levels/][4] Bitcoin Coin Days Destroyed Surges After 80000 Dormant [https://bitbo.io/news/bitcoin-cdd-july-spike/][5] Bitcoin News Today: Bitcoin On-Chain Activity Surges 28 [https://www.ainvest.com/news/bitcoin-news-today-bitcoin-chain-activity-surges-28-million-coin-days-destroyed-2507/]