Definition ∞ Coin dormancy rate is a quantitative measure that indicates the average duration a specific cryptocurrency unit remains stationary within a wallet address before being transacted. A higher dormancy rate generally signals a tendency towards long-term holding by asset owners. This metric offers insights into investor behavior.
Context ∞ On-chain analytics frequently employ coin dormancy rates to assess prevailing market sentiment and investor conviction. Fluctuations in this rate can suggest shifts from accumulation to distribution phases, providing valuable data for market observers seeking to understand the underlying supply dynamics and potential future price movements of a digital asset.
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