On-chain data reveals Cardano has observed increased transactions involving dormant coins recently, suggesting that the price decline has caused long-term holders to become active again.
Cardano Has Seen Spikes In Age Consumed Recently
As pointed out by on-chain analytics firm Santiment in an X post, large dormant Cardano wallets have lately been on the move. The indicator of relevance here is the “Age Consumed,” which measures the total number of tokens being moved on the blockchain multiplied by the amount of time since they last moved.
When the value of this metric is high, it means the network is observing the movement of a large number of old tokens. On the other hand, it being low suggests coins being involved in a transaction are the ones that were purchased relatively recently (or alternatively, if old tokens are being shifted, they don’t involve a significant count).
Now, here is the chart shared by Santiment that shows the trend in the Age Consumed for Cardano over the past month:
As displayed in the above graph, the Cardano Age Consumed stayed at relatively low levels during May, but the price plunge in June has been accompanied by a few spikes in the indicator. Interestingly, the spikes only started halfway through the drawdown, meaning that they likely came as a reaction to the bearish action, rather than something that kicked off the decline itself.
These spikes naturally imply that some long-term holders have decided to become active again. This could reflect panic selling from resolute hands, or it may correspond to activity of some other kind; the exact intent is hard to gauge from the Age Consumed metric alone.
In the chart, Santiment has also attached the data of another indicator called the Mean Dollar Invested Age. This indicator calculates the age of the average dollar invested in the cryptocurrency.
As is visible in the graph, the Mean Dollar Invested Age rose steadily through May, implying that the market cap of Cardano was consistently getting older. As the recent spikes in the Age Consumed have appeared, however, the metric’s trajectory has been disturbed.
While there hasn’t been an outright reversal in course, the Mean Dollar Invested Age has still witnessed a slowdown in growth, indicating that the movement of dormant coins has been significant enough to have an impact.
A particularly strong pause in the indicator came alongside June 9th’s Age Consumed spike, which was the largest one on the Cardano network since April. “Historically, clusters of Age Consumed spikes paired with a pause (or downturn) in Mean Dollar Invested Age have often appeared around key market turning points,” explained the analytics firm.
ADA Price
At the time of writing, Cardano is trading around $0.16, down more than 26% over the past week.
