October 4, 2022

Is[in]Crypto takes a look Bitcoin (BTC) on-chain tokens related to the lifetime of current holders. More specifically, the HODL Wave is analyzed to see if there are any similarities to previous market cycles.

The HODL wave shows the percentage of total BTC in circulation that has moved over a specified period of time. Then the peaked HODL wave introduces a slight adjustment, in which the realized price is used instead of the market price. This is to provide more accurate data.

For example, if the one to two year HODL wave band is 15% wide, this means that 15% of the total BTC in circulation has previously moved between one and two years ago.

During the tops of the market cycle, the bands between one day and one month (red) increase significantly. This happens as a result of the long-term holders having distributed all their coins to the short-term holders. This was visible at the market cycle tops of 2013, 2017 and 2021 (black circles). While it was also present, it was not as pronounced at the May or November 2021 highs (white circle).

BTC short holders are at the bottom

Since the all-time high, the most interesting development is the increase in one- to two-year complexes. This happened as a result of the reduction in short-term bands between one week and 12 months.

Since November, the one- to two-year band has risen significantly (black circle). During this period, the short-term bands have decreased significantly (black circle).

In summary, the change in bands from November 2021 to August 2022 was:

  • 1 week – 1 month: 15 to 5%
  • 1-3 months: 15 to 10%
  • 3-6 months: 17 to 14%
  • 6-12 months: 38 to 22%
  • 1-2 years: 4 to 37%

Furthermore, when bands shorter than one month are removed, the current 91% is in line with the lows of the previous market cycle. This means that short holders currently only own 9% of the tokens in circulation.

Previous buying cycles

Historically, the one- to two-year band was close to 35% when the absolute bottom was reached. In 2015, the group was at 33% when it bottomed out, while in 2018 it was at 30%, but it rose rapidly to reach a high of 48% just three months later.

Right now, the band is at 37% and growing. Therefore, it is possible that the price is in the accumulation phase after the bottom.

At the end of the build-up phase, the one- to two-year band shrinks once again, while the two- to three-year band begins to swell.

Since the one- to two-year band has been rising since November, if these buyers were to hold, they would gradually move to the two- to three-year band (green) beginning in November 2022. If this were to happen, it would likely signal the end of the phase accumulation and the start of the next bull market.

For Be[in]Crypto’s latest Bitcoin (BTC) analysis, click here

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