XRP Dormant Coins On The Move: Reason Behind Price Plunge?

Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing How Our News is Made Strict editorial policy that focuses on accuracy, relevance, and impartiality Ad discliamer Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. On-chain data shows old XRP tokens have been moving back into circulation recently, a potential sign that long-term holders have been taking profits. XRP Mean Dollar Invested Age Has Seen A Drop Recently

According to data from the on-chain analytics firm Santiment, the XRP network has seen signs of movement from veteran hands. Two key metrics highlight this trend: Mean Dollar Invested Age and Age Consumed. The first of these, the Mean Dollar Invested Age, keeps track of the average age (in days) of every dollar invested into the cryptocurrency. The ‘age’ of a coin or the USD value invested in it is tracked from the point of the coin’s last transaction. Related Reading Ethereum Exchange Reserve Plummets: Over 1 Million ETH Withdrawn 20 hours ago

For example, if a coin remains dormant for 10 days, it accumulates 10 coin days. If the price at the time of its last movement was $2, then it’s carrying 20 coin-dollar days. The Mean Dollar Invested Age per dollar in this case is, therefore, 10 coin-dollar days.

Now, what happens when a coin that has been dormant for some period is finally moved? Both the coin days and coin-dollar days associated to it reset back to zero. In other words, its age is ‘consumed.’ The second indicator of relevance here, the Age Consumed, keeps track of the coin days being destroyed in this manner across the network every day.

Below is a chart that shows how the Mean Dollar Invested Age and Age Consumed have changed for XRP over the past year. Looks like the metrics have been pointing at moves from old coins in recent days | Source: Santiment on X

As is visible in the graph, the XRP Mean Dollar Invested Age has witnessed a decline during the last few weeks, indicating that the average dollar invested into the asset is becoming younger. The indicator’s value has now come down to 593 days, which is 91 days lower compared to one month ago.

The Age Consumed has seen some notable spikes alongside this decline, which means that long-term holders have been making moves. The long-term holders refer to the HODLers of the market, who hold for long periods with strong conviction and, in the process, amass a large number of coin days.

When these diamond hands finally make moves, the Age Consumed tends to register spikes as large-scale coin days destruction accompanies them. From the chart, it’s apparent that most of the recent large spikes came just as XRP hit its price top. This could be a potential sign that the long-term holders were cashing in on the rally. Related Reading Bitcoin Remains Flat—And The SSR Ratio Might Explain Why 22 hours ago

Since then, the cryptocurrency has plunged. It now remains to be seen whether the Age Consumed would continue to spike in the near future or if the HODLers are done for now. XRP Price

At the time of writing, XRP is trading around $3.15, down more than 10% in the last week. The trend in the asset’s price over the past month | Source: XRPUSDT on TradingView Featured image from Dall-E, Santiment.net, chart from TradingView.com