CDD calculates the number of coin days destroyed when Bitcoin that hasn’t moved for a long period is spent or transferred. A spike in CDD indicates a large movement of older coins, which can signify a change in market sentiment, often linked to either major market shifts or significant investor activity.

The adjusted CDD takes the number of coin days destroyed and normalizes it against the total supply of Bitcoin. This helps to reveal trends in the market where long-term holders, considered to be more informed or experienced investors, move their coins. Large spikes in adjusted CDD may indicate significant selling activity from these holders, which can often coincide with major market events or price shifts.