According to U.Today, Bitcoin's average dormancy has reached a 13-year high, as per recent data shared by Ki Young Ju, the CEO of CryptoQuant. This increase in dormancy indicates a significant transfer of older Bitcoins to new holders, which could potentially reshape the cryptocurrency's ownership landscape. On March 23, Bitcoin's Average Dormancy reached a level of 227.684. Average Dormancy is a metric that represents the average number of 'destroyed days' of moved coins, calculated by dividing Coin Days Destroyed (CDD) by the total movement of coins.
A higher Average Dormancy value typically suggests that long-term holders are moving or possibly selling their coins, which could indicate a potential price drop. The Average Dormancy of Bitcoin hitting a 13-year peak is significant for several reasons. Firstly, the increase implies 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.
Secondly, 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.
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.
