Average Dormancy – Block-Based

📘 Average Dormancy – Block-Based

What Is It?

Average Dormancy measures the average age of coins that moved in a specific block. In other words, how long had the coins been dormant before they were transacted?

It doesn’t just show how many coins moved—it shows how old the moved coins were.

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🔢 Formula

• b_cdd: Total coin-days destroyed in the block

• b_val: Total coin volume transferred in the block

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🧭 What Is It Used For?

• Distinguishing Short vs Long-Term Investors: High Average Dormancy → Older coins are moving Low Average Dormancy → Mostly fresh coins or short-term activity

• Tracking Trend Health: If price rises but average dormancy also rises → smart money might be exiting

• Dip Identification: Low price + low dormancy = likely accumulation by new holders or exchanges

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🎯 Why Use Block-Based Data?

While daily averages can hide important movements, block-based dormancy offers:

• Higher resolution

• Faster detection of behavioral shifts

• Ability to catch short-term trend changes

Instead of “what happened today,” block-level analysis answers: “Who just woke up in this exact block?”

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🔍 What to Watch For

• High Values: Average dormancy exceeding 50–100 days often signals older holders moving funds

• Very Low Values: Average of 1–2 days = mostly new coins or internal exchange flows, often low volatility

• Rising Price + Rising Dormancy: This is a red flag. It can mean long-term holders are selling into strength.

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⚙️ How It Works

1. Each coin’s age (days since last moved) is calculated

2. Age × amount = coin-day destroyed

3. Sum of all coin-days / total transferred volume = average dormancy

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🧠 Strategic Interpretations

• “Price is flat, but average dormancy just spiked → old coins moving silently.”

• “Dormancy stayed low during price rally → strong hands are holding.”

• “Price surged and so did dormancy → be cautious, distribution may be underway.”