On-chain analytics firm Santiment has revealed that Dogecoin and XRP are flashing bullish signals in an often-overlooked indicator.
The average number of years of investment in USD for Dogecoin, XRP, and Bitcoin has decreased recently
In a new article for X, Santiment discusses recent trends in the average dollar investment age metric for several of the top currencies in the cryptocurrency space.
Average Dollar Age tracks the average age of tokens held in cryptocurrency for each dollar held. This metric is similar to Average Coin Age, which measures the average age of tokens in the entire circulating supply.
Average Coin Age uses on-chain data to determine when each coin last moved on the network and calculates an average of the supply from that. Average USD Investment Age uses the same data, except it converts coins to USD values based on the price when they last moved.
Now, here’s a chart showing the average dollar investment age trend for the top five digital assets: Bitcoin (BTC), XRP (XRP), Dogecoin (DOGE), Ethereum (ETH), and Chainlink (LINK).
As shown in the chart above, the average years of investment in USD for all five cryptocurrencies have declined recently, but the declines for Ethereum and Chainlink have been quite small.
On the other hand, the indicators for Bitcoin, XRP, and Dogecoin have seen a very clear decline. As for what this decline in the indicator means, Santiment explained:
When the network’s average invested dollar age line declines, it indicates that older, stagnant wallets (especially from large key stakeholders) are putting their idle coins back into circulation, increasing network activity.
While this suggests that old hands may be participating in the selling, another view could be that new capital is flowing into the market, buying up these dormant coins and lowering the average age.
In fact, historically, this pattern has proven to be bullish, as the analyst firm noted:
This is one of the key metrics in every token’s lifecycle and helps validate whether a bull run can and should continue. The 2017 and 2021 bull runs similarly didn’t stop until the average age of assets started to “rise” (get older) again.
Of the three assets that saw a sharp decline in average dollar age, Dogecoin saw a particularly sharp and rapid decline; the average dollar age invested in the memecoin fell 31% over the past eight weeks.
DOGE Price
At the time of writing, Dogecoin’s price is hovering around $0.403, having fallen by nearly 2% over the past seven days.
