An analyst explained that during the recent bull market, the average lifespan of Bitcoin tokens has been increasing, which could be favorable for the asset's price.
The average coin age of Bitcoin has recently shown an upward trend.
In a recent post on X, CryptoQuant author Axel Adler Jr discussed the recent trend of Bitcoin's average coin age. 'Average coin age' is an on-chain metric used to track the average time that BTC tokens remain dormant.
If a coin remains static at a certain address without participating in any transaction activity, it is considered dormant. The longer a coin remains in this state, the greater its 'age' becomes.
Now, here are the charts shared by the analyst showing the trends of Bitcoin's average coin age's 30-day and 365-day moving averages (MA) over the past few years:
As shown in the figure above, the 30-day moving average of Bitcoin's average coin age has seen some sharp increases this year, but it has also experienced equally sharp declines. This indicates that investors have been participating in certain phases of HODLing, but they have also not shied away from taking profits.
However, overall, holders have shown significant determination, as the 365-day moving average of this indicator has been in a sustained upward trend since the end of the bear market in 2022.
Statistically, the longer investors hold onto tokens, the less likely they are to sell them. Therefore, the increasing tendency of investors to keep tokens idle may be a bullish signal for cryptocurrency prices.
Interestingly, this trend did not occur during the 2021 bull market, as although the 30-day moving average of the average coin age showed an upward trend for a period, the 365-day moving average declined throughout the year. This may indicate that ordinary investors have become smarter in this cycle.
In the short term, the 30-day moving average of this indicator has been rapidly climbing, indicating that the Bitcoin market is currently in one of the phases of active accumulation.
In other news, the market intelligence platform IntoTheBlock shared the latest information regarding the status of BTC supply over 5 years.
From the chart, it can be seen that this portion of the Bitcoin supply has been rising recently. Following a recent surge, nearly one-third of the circulating tokens have not participated in any transactions for over five years.
BTC price
Bitcoin has dropped 3% in the past 24 hours, with a price of $95,900.
