Definition ∞ Old Coin Dormancy measures the average time that spent coins have remained unspent on the blockchain, indicating how long holders have retained their assets before moving them. A rising dormancy suggests that older coins are becoming more active, potentially signaling long-term holders realizing profits or reallocating capital. Conversely, low dormancy indicates that recently acquired coins are being moved, often by short-term traders. It provides insight into the spending behavior of different investor cohorts.
Context ∞ Old coin dormancy is a key metric utilized in on-chain analysis to assess market sentiment and predict potential supply shifts. News reports often refer to changes in dormancy to explain market movements, particularly during bull or bear cycles. Understanding this metric helps differentiate between strong holder conviction and periods of profit-taking or capitulation.
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