Dogecoin and XRP Flash Bullish Signals as Mean Dollar Invested Age Drops: Santiment

The on-chain analytics firm Santiment has revealed that Dogecoin and XRP are flashing bullish signals in an often overlooked metric.

On-chain analytics firm Santiment has highlighted that Dogecoin and XRP are showing bullish signals in a metric that is often overlooked.

Dogecoin, XRP, & Bitcoin Saw A Recent Decrease In Mean Dollar Invested Age

According to a recent post by Santiment on X, the firm has covered the latest trend in the Mean Dollar Invested Age indicator for some of the top coins in the cryptocurrency space.

The “Mean Dollar Invested Age” tracks the average age of every dollar that the holders have invested in the cryptocurrency. This metric is similar to the Mean Coin Age, which measures the average age of tokens in the entire circulating supply.

The Mean Coin Age uses on-chain data to note when every coin was last moved on the network and calculates the mean for the supply based on it. The Mean Dollar Invested Age works on the same data, except that it converts the coins to their USD value based on the price at their last movement.

Now, here’s a chart that shows the trend in the Mean Dollar Invested Age for five top digital assets: Bitcoin (BTC), XRP (XRP), Dogecoin (DOGE), Ethereum (ETH), and Chainlink (LINK).

The Mean Dollar Invested Age has recently declined for all five of these cryptocurrencies, but the scale of the drawdown has been small for Ethereum and Chainlink.

On the other hand, Bitcoin, XRP, and Dogecoin have seen a very substantial decrease in the indicator. As for what it means when this metric trends down, Santiment explains:

When a network’s Mean Dollar Invested Age line is moving down, it indicates that older, stagnant wallets (particularly from large key stakeholders) are circulating their dormant coins back into circulation, increasing network activity.

While this suggests that the older hands might be participating in selling, another way to look at it could be that new capital is flowing into the market, buying up these dormant coins and bringing the average age down.

However, it seems like the pattern has proven to be bullish historically, as the analytics firm has pointed out:

This is one of the key indicators throughout the history of each coin’s lifespan that helps validate that a bull market can and should continue. The 2017 and 2021 bull markets similarly did not come to a halt until assets’ mean ages started going “up” (getting older) again.

Out of the three assets that have seen a sharp decline in the Mean Dollar Invested Age, Dogecoin has particularly stood out for both the scale and the speed of the drawdown; the average dollar invested in the memecoin has become 31% younger over the last eight weeks.

DOGE Price

Dogecoin is currently trading at around $0.403, having shown a decline of almost 2% over the last seven days.