On-chain analysis firm Santiment reveals that Dogecoin and XRP are releasing bullish signals in a often-overlooked metric - average dollar investment age.
This indicator tracks the average duration that holders have invested each dollar into cryptocurrency, similar to measuring the average coin age in circulation supply.
Average Coin Age determines the last movement time of each coin on the network using on-chain data, and calculates the average supply, while the average dollar investment age uses the same data but converts the coins into dollar value based on the price at the last movement.
Trend Analysis of the Five Major Asset Indicators
Observing the trend of average dollar investment age for the five major digital assets (Bitcoin BTC, XRP, Dogecoin DOGE, Ethereum ETH, and Chainlink LINK), this indicator has recently declined for all five cryptocurrencies, with Ethereum and Chainlink showing smaller declines, while Bitcoin, XRP, and Dogecoin's indicators have significantly dropped.
Interpretation of the Market Significance of the Indicator Decline
Santiment explains that the decline in the network's average dollar investment age line means that outdated, stagnant wallets (especially those of large key stakeholders) are allowing idle money to flow back into the market, heating up network activity. This may indicate that old hands are participating in selling, but it can also be understood as new capital flowing in, buying dormant coins and lowering the average age.
Historically, this pattern has been confirmed as bullish, as it is a key indicator in the lifecycle of each token, helping to confirm whether a bull market can continue. The bull markets of 2017 and 2021 only ended when the average age of assets 'increased' (aged) again. Among the three assets where the average dollar investment age sharply declined, Dogecoin's reduction in both magnitude and speed is particularly notable, with the average dollar age of investments in this meme coin decreasing by 31% over the past eight weeks.
Dogecoin Current Price Performance
As of this writing, the price of Dogecoin is approximately $0.403, having dropped nearly 2% over the past seven days.
