Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
The average Bitcoin (BTC) dormancy has surged to a 13-year high, according to recent data shared by Ki Young Ju, the CEO of CryptoQuant. This uptick in dormancy suggests a significant transfer of older Bitcoins to new holders, potentially reshaping the cryptocurrency's ownership landscape.
On March 23, Bitcoin's Average Dormancy reached a level of 227.684, as indicated by a chart shared by Ki Young Ju on X. Average Dormancy is a metric that represents the average number of "destroyed days" of moved coins. This figure is calculated by dividing Coin Days Destroyed (CDD) by the total movement of coins.
What’s happening?
A higher Average Dormancy value typically indicates that long-term holders are moving or potentially selling their coins, which could signal an impending price drop. The Average Dormancy of Bitcoin hitting a 13-year peak is noteworthy for several reasons. First, the increase suggests that older, long-term holders of Bitcoin are either transferring their holdings or selling them to new investors.
This shift could potentially alter the ownership distribution of Bitcoin, with new participants gaining a larger share of the market. Second, historically, spikes in Average Dormancy have often been followed by increased price volatility. If long-term holders are indeed selling or transferring their coins, it may lead to a greater supply of Bitcoin on the market, potentially putting downward pressure on prices.
Lastly, the rising Average Dormancy could also reflect changing market sentiment among Bitcoin holders. Long-term investors may be responding to macroeconomic factors, regulatory changes or other market dynamics that influence their decision to hold or sell their assets.
Overall, Ki Young Ju's observation about the shifting cap table for Bitcoin underscores the evolving nature of the market. As older Bitcoins are transferred or sold to new holders, the ownership dynamics of Bitcoin are undergoing a significant transformation. Market participants should closely monitor these developments, as they could have far-reaching implications for market sentiment in the coming months.
Arman Shirinyan
Alex Dovbnya
Dan Burgin
U.Today Editorial Team
Vladislav Sopov