Bitcoin Dormancy at Lowest Since 2022: On-Chain Signal Shifts Game

Bitcoin has just silently crossed a pivotal moment. According to the latest data shared by Alex Thorn, head of research at Galaxy Digital, the movement of dormant Bitcoin—those BTC that haven’t budged in months or years—has fallen to its lowest level since the third quarter of 2022. This is an on-chain signal that deserves a deep dive, as it could well reshape market prospects for the months ahead, in an already tense macroeconomic climate.

📊 Coin Days Destroyed: The HODLer Thermometer

Before diving into the numbers, a quick technical refresher is in order. The concept of “coin days destroyed” (CDD) is one of the most revealing indicators of Bitcoin market health. Each Bitcoin that sits idle in a wallet accumulates “coin days”—one BTC dormant for 100 days represents 100 coin days. When that BTC is suddenly spent or transferred, those coin days are “destroyed,” signaling that the holder decided to move their assets after a long period of inactivity.

The value of this metric lies in weighting movements by the age of the coins. A transfer of 10 BTC that are 3 years old (10,950 coin days destroyed) is far more significant than a transfer of 1,000 BTC that are 2 hours old (83 coin days destroyed), because it reflects a deliberate decision by a long-term holder. CDD therefore allows distinguishing daily noise—transfers between exchanges, liquidity movements—from the truly strategic decisions of long-term investors.

This metric was originally developed by on-chain analysts like Willy Woo and has been widely adopted by research teams at Glassnode, CryptoQuant, and Galaxy Digital. It is now one of the reference indicators for assessing HODLer conviction and anticipating cycle turning points.

📉 What Galaxy Digital’s Data Says

The data compiled by Alex Thorn shows a clear and statistically significant trend: dormant Bitcoin activity in the second quarter of 2026 fell to its lowest level since Q3 2022. CDD follows the same downward trajectory, confirming that the signal is not an artifact but an underlying trend.

For Thorn, previous CDD spikes were “clearly linked to profit-taking by the OGs”—those historical holders who bought Bitcoin in its early days (sometimes for less than $100) and saw their investment multiply by hundreds or even thousands. The behavior of these OGs is crucial because they hold a disproportionate share of the total supply: it is estimated that addresses created before 2017 still control several million BTC.

This pattern is not new. It closely resembles the behavior observed during the 2017 bull run, where long-term holders gradually distributed their coins as the price rose, before abruptly slowing their sales once the market entered an accumulation phase. History seems to be repeating itself, but with important nuances tied to the market’s maturity.

🔄 2024-2025: The Great OG Distribution

To understand the current signal, we need to go back two years. Between 2024 and 2025, long-term holders distributed a significant amount of Bitcoin. Several factors explain this unprecedented wave of selling in terms of scale:

• The approval of spot Bitcoin ETFs (January 2024) created a peak of enthusiasm and liquidity, allowing OGs to sell into a deep market without crashing the price—a unique opportunity in Bitcoin’s history
• The April 2024 halving generated a classic bullish rally, conducive to profit-taking at historically high price levels
• Geopolitical tensions (Iran-USA, US-China trade war, Ukrainian conflict) created exploitable volatility windows
• Persistent inflation and the Fed’s high interest rates (held at 5.25-5.50% for much of 2024) pushed some holders to lock in gains rather than risk a correction

This massive distribution was absorbed by a new generation of investors—institutions via ETFs (BlackRock, Fidelity, Grayscale), sovereign wealth funds, corporate treasuries (MicroStrategy continuing its purchases), and retail investors arriving through regulated products. The market has matured profoundly, and this torch-passing between OGs and new entrants is a sign of Bitcoin’s structural maturation as an asset class.

🔍 Why the Slowdown in OG Sales Is a Bullish Signal

The drop in CDD to its lowest level since 2022 suggests that OGs have largely slowed, if not stopped, their selling. While encouraging, this behavior deserves a nuanced analysis. Several interpretations are possible:

• Exhaustion of sell-side supply: OGs who wanted to sell have already done so during the 2024-2025 distribution phase. Those who remain are “diamond hands” determined to hodl until the next major cycle, possibly beyond $100,000
• Generational behavior shift: With market maturity (ETFs, regulatory Clarity Act, institutional adoption), historical holders see fewer reasons to sell prematurely. Bitcoin is no longer perceived as a risky bet but as a legitimate store of value
• Accumulation signal: Historically, CDD lows have preceded phases of accumulation and bullish recovery. In 2015, 2019, and 2020, CDD troughs were followed by significant rallies within 6 to 12 months

In a market where Bitcoin supply is structurally capped at 21 million units (of which nearly 19.7 million have already been mined), the slowdown in circulation of dormant coins exerts natural upward pressure on price—any additional demand meets increasingly scarce supply. This is the basic mechanism of the “supply squeeze” that has made Bitcoin’s reputation in every bull cycle.

🧠 Macro Context: The Bond Yield Trap

But this promising on-chain signal cannot be read without its macroeconomic context. And the current context is anything but simple. Bitcoin is trading below $64,000, under pressure from a sharp rise in US bond yields. 10-year yields have climbed to levels not seen in months, reinforcing expectations of further Fed rate hikes.

Why this matters: higher bond yields make risk-free assets (US Treasuries) more attractive, diverting capital from risky assets like Bitcoin. The crypto market, despite its decoupling narrative, remains strongly correlated with traditional markets, and any rise in rates mechanically weighs on valuations across all risky assets.

However, the situation is more nuanced than it appears. Because the drop in CDD suggests that natural sellers (the OGs) are withdrawing from the market, creating a technical floor. If macro remains unfavorable, the relative scarcity of supply could limit the downside and create a “dynamic floor” that shifts higher over time.

It is also worth noting that high bond yields are often a symptom of an economy that is holding up better than expected—which is paradoxically positive for long-term Bitcoin demand, as a strong economy supports adoption and investment.

📈 Technical Analysis: Where Does Bitcoin Stand?

Technically, Bitcoin is moving in a pivotal zone. After hitting all-time highs in 2024-2025 following the ETF influx, BTC corrected and has been consolidating between $58,000 and $68,000 for several weeks. The $64,000 level is psychologically important—it corresponds to major support/resistance zones identified by technical analysis:

• Major support: $58,000 (200-day moving average, also the average entry price of spot ETFs, a level that held during previous tests)
• Immediate resistance: $68,000 (top of the consolidation channel, multiple rejections recorded)
• Fibonacci 0.618: $62,500 (classic retracement level in a bull market, a decision zone for traders)
• Ichimoku Cloud: the cloud is bullish on the weekly timeframe but tension is tightening, indicating a possible volatility compression

If low CDD indicates that HODLers are not selling, and if macro pressure eases (falling yields, a more accommodative Fed), Bitcoin could find the resources to break above $68,000 resistance and head back toward highs. But if the Fed continues to tighten, even the best on-chain health won’t be enough to counter macro flows—the market has already proven in the past that global liquidity trumps asset-specific fundamentals.

🏛️ The Battle of Narratives: ETFs vs On-Chain

A key element to integrate into this analysis: the arrival of ETFs has profoundly altered the structure of the Bitcoin market. Before 2024, the market was dominated by on-chain flows—movements between wallets, exchange inflows/outflows, miner behavior. Today, ETF flows (institutional buying and selling through regulated products) rival traditional on-chain metrics in importance, creating an unprecedented duality.

Bitcoin ETFs have recorded massive net inflows since their launch—over $20 billion cumulative at their peak. But they are also vulnerable to outflows during risk-off periods. Last week, Ethereum ETFs closed in the red, ending a 5-day streak of net inflows, a signal that may indicate a temporary slowdown in institutional appetite or a sector rotation.

This new dynamic has an important implication: the correlation between Bitcoin’s price and traditional on-chain metrics (like CDD) could weaken as ETF flows grow in importance. The buying and selling decisions of institutions are not driven by the same factors as those of historical OGs. An institution may sell its ETF holdings for portfolio rebalancing, regulatory constraints, or liquidity reasons—motives that have nothing to do with the long-term conviction of HODLers.

A drop in CDD combined with potential ETF outflows would create an interesting equilibrium: OGs are not selling (reduced supply), but institutional demand is weakening (reduced demand). In this scenario, the price could stagnate in a range, waiting for a directional catalyst—perhaps the adoption or rejection of the Clarity Act by the US Senate, or a surprise Fed decision.

🗺️ Lessons from History: 2017 vs 2026

Alex Thorn compares the current situation to 2017, and this analogy deserves a thorough exploration. Back then, after a spectacular bull run (from $1,000 to $20,000), OGs massively distributed their coins. CDD spiked, signaling an unprecedented wave of profit-taking. Then, once distribution was complete and the market entered a bear market, CDD fell to floor levels—signaling that only the most convinced “believers” remained in play.

But 2026 is not 2017, and several fundamental differences must be noted:

• Market infrastructure: in 2017, exchanges were immature, derivatives nearly non-existent, and regulation embryonic. In 2026, the market has regulated ETFs, CME futures, institutional insurance, and a legal framework under construction (Clarity Act, MiCA)
• Holder diversification: in 2018, a few thousand addresses controlled a disproportionate share of supply. Today, the holder base is broader and more diversified
• Real adoption: the Lightning Network, payments, stablecoins, and tokenization of real-world assets (RWA) create utility that did not exist in 2017
• The macro factor: in 2017, the context was a general bull market (QE, low rates). In 2026, macro is more complex (high rates, inflation, geopolitical tensions)

If in 2018 Bitcoin crashed 80% (from $20,000 to $3,200), such a drop today seems unlikely due to market depth and holder diversification. A 30-40% correction, on the other hand, is entirely possible if macro conditions deteriorate.

📊 Other On-Chain Signals to Watch

Beyond CDD, several other metrics confirm or refute the signal and help refine the diagnosis:

• Supply in Profit: currently around 60%, this level is considered neutral. Historically, levels above 95% signal an overbought zone, while levels below 40% indicate a capitulation area and opportunistic buying
• Exchange Net Flow: if BTC are massively leaving exchanges for private wallets (as has been the case for several weeks), it signals that holders prefer to keep their assets in self-custody—a sign of bullish conviction despite the uncertain macro context
• Hashrate: at an all-time high, indicating that miners remain confident in future profitability despite the 2024 halving which halved their rewards
• MVRV Z-Score: an indicator comparing market capitalization to realized capitalization. It currently sits in neutral territory, neither overbought nor oversold
• Puell Multiple: measures the relative profitability of miners. In the low zone, it has historically signaled long-term buying opportunities

The convergence of these metrics with low CDD strengthens the thesis of a market in an accumulation phase, even if the absence of an immediate bullish catalyst could keep the price in a narrow range for several more weeks.

🔮 Scenarios for the Coming Months

Bullish Scenario (probability: 40%)

The Fed pivots toward a more accommodative policy in response to an economic slowdown. Bond yields fall, capital returns to risky assets. OGs continue to hodl (low CDD), ETFs resume sustained net inflows. The Clarity Act is passed by the Senate, providing historic regulatory clarity. Bitcoin breaks above $68,000 and targets $85,000-100,000 by end of 2026. This is the most favorable scenario and requires an alignment of macro, regulatory, and on-chain planets.

Neutral Scenario (probability: 35%)

Macro remains mixed—neither recession nor clear recovery. Bitcoin oscillates between $55,000 and $75,000 in a consolidation range that could last several months, possibly until the end of the year. Low CDD and supply scarcity prevent a sharp drop, but the absence of a strong catalyst limits upside potential. This is the classic sideways market during macro uncertainty, where traders exploit the range while long-term investors accumulate.

Bearish Scenario (probability: 25%)

The Fed surprises with another tightening, inflation rebounds, or a major geopolitical shock triggers a flight to cash and Treasuries. ETFs record massive outflows. Bitcoin breaks below $58,000 support and corrects toward $45,000-50,000. In this case, even low CDD would not prevent a decline, as selling would then be motivated by liquidity (margin calls, forced sales, ETF redemptions) rather than discretionary HODLer decisions. However, low CDD would limit the depth and duration of the correction.

🌍 The Geopolitical Context

It is impossible to ignore the geopolitical factor in this analysis. Tensions between Iran and the United States (with the recent freezing of $131 million in Iranian funds), the US-China trade war, political instability in Europe, and international sanctions create an environment where Bitcoin is caught between two fires:

• On one hand, its narrative as a “digital safe haven” is strengthened by sanctions and capital controls. In countries under sanctions or with high inflation, Bitcoin becomes a financial lifeline
• On the other, its correlation with risky assets during acute stress limits its safe-haven role in times of immediate crisis

The Bitcoin Policy Institute is also joining the US State Department’s “digital freedom” program, a significant step in recognizing Bitcoin as a diplomatic and financial tool. This gradual institutionalization reinforces Bitcoin’s legitimacy but also exposes it to political headwinds—a change of administration could radically alter the US stance on crypto.

💡 What This Means for the Investor

For the retail investor, this on-chain signal is not an automatic “buy signal.” It fits into a broader analytical framework that must take into account:

• One’s own risk tolerance and investment horizon
• The global macroeconomic context (Fed decisions, inflation, potential recession)
• Evolving regulation (Clarity Act in the US, MiCA in Europe)
• ETF flows and institutional appetite
• Portfolio diversification

The drop in CDD is an indicator of network health and long-term holder conviction, but it does not immunize against macro shocks or liquidity crises. It simply suggests that, all else being equal, structural selling pressure is decreasing—which is fundamentally favorable over the long term. For an investor with a 12-24 month horizon, this is a reassuring signal. For a short-term trader, it is information to integrate into a multi-factor analysis.

🎯 Conclusion

Galaxy Digital’s data offers us a unique window into the behavior of the most historical actors in the Bitcoin market. The fact that dormant Bitcoin movements have reached their lowest level since Q3 2022 is a strong signal: the OGs have largely slowed, if not stopped, their distribution. Those who held Bitcoin for years and wanted to sell have likely already done so during the 2024-2025 bull run.

What remains are the “diamond hands”—convinced holders who will not sell at just any price. Combined with increasingly scarce supply (19.7 million BTC already mined, millions permanently lost, an issuance rate halved by the halving), this behavior creates the conditions for a supply squeeze that, sooner or later, should be reflected in the price. The question is not whether, but when.

But in the near term, macro remains the dominant factor. Bitcoin dances to the tune of bond yields and Fed decisions. The on-chain signal is encouraging, but it is only one piece of a complex puzzle where geopolitics, regulation, and institutional flows play an equally decisive role. Investors who ignore macro in favor of on-chain alone do so at their own risk.

One thing is certain: Bitcoin’s market structure has never been as healthy as it is today. Fewer sellers, more HODLers, growing institutional adoption, and political recognition (Clarity Act in the Senate, State Department programs). If macro winds turn—and they will eventually turn, as in every cycle—Bitcoin could surprise with the violence of its rebound. And this time, on-chain fundamentals suggest that the next bullish phase could be the most durable in Bitcoin’s history.

📚 Sources

• Cointelegraph — Bitcoin OG selling eases as dormant BTC movement hits 4-year low: Galaxy
• Cointelegraph — Bitcoin advocacy group to join US State Department’s ‘digital freedom’ program
• Cointelegraph — Ethereum ETFs close week in red, end 5-day inflow streak
• On-chain data: Galaxy Digital / Alex Thorn (Q2 2026)
• Glassnode — Reference on-chain metrics
• Cointelegraph — CFTC issues second warning to prediction markets

⚠️ Opinion and analysis — not investment advice
This article is provided for informational and analytical purposes only. It does not constitute investment advice, a solicitation, or a recommendation to buy/sell digital assets. Cryptocurrencies involve high risks—only invest what you can afford to lose. Always do your own research (DYOR) before making any financial decisions.
This article is not sponsored.