LloydLewis21Jan 11, 2022
What Is Dormancy?
- Average number of days destroyed per coin transacted in any given day, represented in the following formula:
Fig 1: Dormancy FormulaFig 1 shows how the ratio of ‘Destruction’ and ‘Volume’ is used to describe the average number of days each $BTC transacted had remained dormant I.e unmoved
Destruction
- Total number of coin days destroyed
Volume
- Total number of coins transacted through the blockchain (not at exchanges)
🌟Higher dormancy indicates increased number of older $BTC transacted that day I.e older hands releasing their $BTC into circulation
🌟To make it simple! Average Dormancy refers to ‘spent’ or ‘unrealised’ destruction relative to transactions
Fig 2: $BTC Adjusted Dormancy Flow- Fig 2 shows the Adjusted Dormancy Flow
- Not enough attention given to this metric relative to its importance as one of the elite metrics of $BTC’s long term economic health
- This ‘bottoming’ indicator is only seen FIVE TIMES during the history of $BTC…🤔
Sources:
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