Definition ∞ Entity adjusted dormancy is an on-chain metric that measures the average number of days each coin transacted has remained dormant, weighted by the value of the transaction. This metric accounts for distinct network participants, rather than individual addresses, to provide a more accurate view of long-term holder behavior. A low dormancy value suggests recent coin movement, while a high value indicates long-held coins are moving.
Context ∞ Crypto news often references entity adjusted dormancy to gauge the spending habits of long-term investors. A decreasing trend in this metric can signal profit-taking or redistribution by experienced holders, potentially preceding market volatility. Conversely, increasing dormancy suggests HODLing behavior and a lack of selling pressure, which may support future price appreciation.
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