Definition ∞ Holder spending patterns analyze how long-term cryptocurrency holders move or sell their digital assets. This metric tracks the behavior of addresses that have held cryptocurrency for extended periods, observing when these established holders decide to transfer or sell their holdings. Changes in these patterns can signal shifts in market sentiment, indicating whether experienced participants are accumulating, taking profits, or divesting. Significant increases in spending by long-term holders might suggest an impending market top or a period of increased supply. This data provides insights into the conviction levels of core investors.
Context ∞ Crypto analysts often examine holder spending patterns to identify potential market shifts, particularly when assessing whether a rally is sustainable or nearing exhaustion. News reports might highlight instances where older coins, previously dormant, begin moving, suggesting that long-term investors are realizing gains. This behavior can exert downward pressure on prices if a substantial amount of accumulated supply enters the market. Understanding these movements helps predict market cycles and investor psychology.
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