A Bitcoin on-chain indicator is currently forming a pattern that has previously led to significant selloffs of the cryptocurrency.
Bitcoin 100-Day SMA Supply Adjusted Dormancy Has Rapidly Gone Up
As pointed out by an analyst in a CryptoQuant post, the selloff could potentially be even stronger than the one seen in November 2018. A relevant concept here is of a “coin day,” which is the amount of 1 BTC accumulated after sitting still on the chain for 1 day. Thus, when a token stays dormant for a certain number of days, it gains coin days of the same amount.
However, when this coin is finally moved, its coin days naturally reset back to zero, and the coin days it had previously accumulated are said to