On-chain analytics firm Santiment has revealed that Dogecoin and XRP are flashing bullish signals according to an often overlooked metric.

Dogecoin, XRP, and Bitcoin Have Recently Seen a Drop in Average Dollar Investment Age

In a new post on X, Santiment discussed the latest trends in the Average Dollar Investment Age indicator of some of the top coins in the crypto space.

“Mean Dollar Invested Age” tracks the average age of each dollar that holders have invested in cryptocurrencies. This metric is similar to Mean Coin Age, a metric that measures the average age of tokens in the entire circulating supply.

Mean Coin Age uses on-chain data to determine when each coin was last moved on the network and calculates an average value for the supply based on that data. Mean Dollar Invested Age operates on the same data, except it converts coins to their USD value based on the price at their last move.

Here is a chart showing the trend in Average Dollar Investment Age for the top five digital assets: Bitcoin (BTC), XRP (XRP), Dogecoin (DOGE), Ethereum (ETH), and Chainlink (LINK).

As shown in the chart above, Mean Dollar Invested Age has recorded a decline for all five of these cryptocurrencies recently, but the size of the decline has been quite small in the case of Ethereum and Chainlink.

On the other hand, Bitcoin, XRP, and Dogecoin have seen a very significant drop in this index. On what this index is trending down for, Santiment explained:

When a network's Average Invested Age line is going down, this indicates that old, stagnant wallets (especially from major stakeholders) are putting their dormant coins back into circulation, increasing network activity.

While this suggests that older players are likely to be selling, another way to look at it is that new capital is flowing into the market, buying up these dormant coins and pushing the average age down.

Indeed, historically, the pattern has proven to be bullish, as the analytics firm points out:

This is one of the key indicators throughout the history of each coin that validates that a bull market can and should continue. Likewise, the 2017 and 2021 bull markets did not stop until the average age of the asset began to “rise” (age) again.

Of the three assets that saw sharp declines in Average Dollar Investment Age, Dogecoin stood out in both the size and speed of the decline; the average dollar invested in memecoin has dropped 31% over the past eight weeks.

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