Definition ∞ Dormant wallet activity refers to the movement of digital assets from addresses that have been inactive for extended periods. These wallets often hold substantial quantities of cryptocurrency acquired years ago, sometimes at much lower prices. The sudden activation of such addresses, marked by asset transfers, can signal a change in sentiment or a decision by long-term holders to sell or redistribute their holdings. This activity is closely watched by market observers for its potential impact on supply dynamics.
Context ∞ The reawakening of dormant wallets frequently generates speculation regarding the intentions of early investors or founders. Such movements can exert downward pressure on prices if large amounts of previously static assets enter active circulation for selling. Analysts monitor these events to gauge shifts in long-term holder conviction and potential market supply shocks.
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