Definition ∞ A Coin Dormancy Spike refers to a sudden, significant increase in the average time that coins on a blockchain have remained unmoved before being spent. This metric indicates that a substantial volume of previously inactive coins has become active. It often suggests a shift in holding behavior, where long-term holders begin to sell their assets. Such an event can signal a significant change in market sentiment or price action.
Context ∞ Crypto news often reports on Coin Dormancy Spikes as an indicator of potential market volatility or profit-taking by experienced investors. Analysts interpret these spikes to gauge whether long-term holders are liquidating positions, which can precede downward price pressure. This metric offers a view into the conviction levels of different investor cohorts.
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