On-Chain Signals Hint at Profit-Taking by Long-Term Holders

Dormancy reflects how long coins stay idle before being spent. A recent uptick in this metric suggests that long-term holders (HODLers) are beginning to cash out after Bitcoin’s surge past $100,000.

These coins, dormant for extended periods, are now being unlocked as investors seek to realize profits from the current rally.

Velocity Remains Low, Warning of Weak Market Rotation

While according to the information Dormancy increases, BTC Velocity—measuring transaction frequency—remains subdued. This mismatch points to limited liquidity rotation in the broader market.

In simple terms, coins are being sold by older holders, but new buying demand appears soft. The lack of high-frequency activity implies that market absorption of the selling pressure may be weak.

This dynamic introduces short-term headwinds and could weigh on momentum in the near term.

Implications: Supply Return Could Reshape Price Action

The combination of rising Dormancy and low Velocity suggests that supply is quietly creeping back in—without the offsetting power of fresh demand.

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As previously dormant coins reenter circulation, they could dampen short-term upside if buyers fail to absorb the flow.

This trend doesn’t necessarily mark the end of the rally, but it serves as a caution flag for traders and analysts. The coming weeks may reveal whether the market can handle this shift in supply or if a pullback is looming.

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