CVDD Metric

Definition ∞ The CVDD metric, or Cumulative Value-Days Destroyed, is an on-chain indicator used in Bitcoin analysis to identify potential market bottoms. It represents the cumulative sum of “value-days destroyed” over Bitcoin’s history, adjusted by its market age. A rising CVDD suggests long-term holders are selling, while a flattening or declining trend often indicates a period of accumulation and potential price floor formation.
Context ∞ Analysts frequently cite the CVDD metric when assessing Bitcoin’s market cycles and predicting periods of significant price reversals. Its application in current market commentary helps determine if a price decline represents a temporary correction or a deeper capitulation phase, guiding investor decisions.