Indicator Overview

The indicator is Dormancy. It is defined as the Average number of Coin Days Destroyed (CDD) per Bitcoin transaction over a specified day. It measures the average 'age' of the supply that is moving relative to the total number of transactions. Essentially, it tracks if the coins being spent are generally old or new, adjusted for network activity.

How To Use

Dormancy is a long-term on-chain indicator used to distinguish selling pressure from old holders versus young holders.

High Dormancy Readings occur when a large number of old Coin Days are destroyed, meaning a high volume of long-held Bitcoin is being moved relative to the number of transactions. This often signals long-term holder distribution and tends to happen around market tops.

Low Dormancy Readings occur when the value of Coin Days Destroyed is low relative to the number of transactions. This implies that the moving coins are predominantly young supply, and old holders are maintaining their conviction (HODLing). This is typical behaviour during market bottoms and major periods of accumulation.