Coin dormancy change measures alterations in the length of time digital coins remain unspent in wallets. This on-chain metric tracks the average duration coins have been held without being moved, providing insight into the holding behavior of market participants. An increase in dormancy suggests accumulation and long-term holding sentiment, while a decrease indicates coins are being moved, often for selling or spending. It serves as a gauge of investor conviction and market liquidity.
Context
News reports frequently cite coin dormancy changes to assess market sentiment and predict potential price movements. A significant rise in dormancy can signal a supply squeeze, whereas a sharp drop might precede increased selling pressure. Analyzing these changes helps in understanding the underlying behavior of coin holders and their collective market outlook.
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