Dormant Coins Stirring: A Bullish Signal for XRP and Dogecoin

Despite a recent market correction, a key indicator suggests a bullish long-term outlook for XRP and Dogecoin. This indicator, known as "Mean Dollar Invested Age" (MDIA), measures the average age of investment dollars within a cryptocurrency network. A declining MDIA indicates that older, dormant coins are re-entering circulation, often a precursor to bullish market trends.

Over the past 60 weeks, Bitcoin's MDIA has dropped by 31% to 439 days. More significantly, XRP's MDIA has declined by 22% in just 14 weeks to 865 days, while Dogecoin has experienced the most dramatic drop, falling 31% in eight weeks to 370 days.

What Does This Mean?

A decrease in MDIA suggests increased network activity. Historically, this has coincided with bullish market trends, as observed during the 2017 and 2021 bull runs. This increased activity likely stems from long-term holders re-engaging with their investments, injecting fresh capital into the market.

Technical Outlook

• XRP: After a recent surge, XRP is forming a descending channel, suggesting a period of consolidation. Support levels of $2.20 and $1.90 are crucial. A break below these levels could lead to further declines. A recovery above $2.50 could pave the way for a renewed push towards $2.80, but short-term volatility is expected.
• Dogecoin: Dogecoin recently broke below its ascending channel, signaling a bearish technical signal. Immediate support lies around $0.38, with stronger support at $0.31. A recovery above $0.44, a key resistance level, could re-ignite the bullish trend.

Long-Term Perspective

While short-term price fluctuations are inevitable, the declining MDIA for both XRP and Dogecoin suggests underlying strength and potential for long-term growth. Increased activity from long-term holders enhances the resilience of these networks.

December 2024, Cryptoniteuae