Dormant Bitcoin Supply Drop Hints at Rally as Ethereum and Solana Surge

By: Eva Baxter

Market Overview

An analysis of the dormant Bitcoin, defined as the percentage of circulating Bitcoin that has remained inactive for over a year, showed essential patterns. The dormant supply reached a historical 71% in November. Major Bitcoin rallies often follow a decrease in this dormant supply, an exciting correlation noted by Pantera Capital.

As long-term holders begin to realize profits, the inactive supply decreases. Coupled with short-term holders buying due to FOMO (Fear of Missing Out), this leads to a surge in prices, with savvy investors capitalizing on the profits. These price increases invariably occur after the decline, not beforehand.

In November, a significant shift in the ‘Supply Last Active 1+ Year Ago' (SLA) metric occurred. This could signal the beginning of a market rally. Meanwhile, Ethereum and Solana, the second and seventh largest cryptocurrencies by market cap respectively, are experiencing an uptick ahead of significant updates. Ethereum developers are getting ready for the DenCun testnet rollout in January, while Solana continues to record impressive gains in the crypto market.