How to read it

CVDD was created by Willy Woo (@woonomic). It is his model - what follows is my implementation of it on this site's data.

Every time a coin moves it destroys the days it sat still. Weight those coin-days by the price on the day they were destroyed, accumulate over all of history, and divide by the age of the market. The result tracks what long-dormant supply has actually changed hands for, which is why it sits far below spot in a bull market and catches up during a capitulation.

The line has been a floor, not a target. Across 5,800+ days price has closed below CVDD exactly once, on 14 January 2015 - the bottom of that cycle. The November 2022 low came within 4% of it and held.

The bottom panel is price divided by CVDD, so 1.0 means spot is sitting on the floor. Cycle tops have printed 5x to 8x. There is no upper band here on purpose - being far above the floor is the normal state and says very little. Today: CVDD $47,379, price $76,838 = 1.62x (Above the floor).

The 6,000,000 divisor is empirical - it is the number that lines the series up with past lows, not something derived from first principles. CVDD is a fitted floor that has described four cycles. It is not a guarantee about a fifth.

Price and coin-days destroyed from the Bitcoin Research Kit (bitview.space), node-computed daily. CVDD is calculated here from those series. Series starts July 2011, before which too few coin-days had accumulated for the metric to mean anything. Not financial advice.