Definition ∞ Bitcoin Supply Aging refers to the analytical metric that categorizes the circulating Bitcoin supply based on how long coins have remained dormant in specific wallet addresses. This analysis tracks the time elapsed since a Bitcoin unit last moved on the blockchain. It provides insight into the holding patterns of market participants, distinguishing between short-term traders and long-term holders. Observing these age bands assists in assessing market sentiment and potential future selling pressure.
Context ∞ Bitcoin Supply Aging currently serves as a significant on-chain indicator for market analysts to gauge investor conviction and potential market tops or bottoms. Discussions often revolve around interpreting shifts in these age bands to forecast price movements and assess the overall health of the Bitcoin network. A critical future development involves refining these metrics to account for more complex holding structures, such as those within custodial services or DeFi protocols, offering a more precise market perspective.
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