Bitcoin HODL Waves are a revolutionary on-chain analysis tool that visualizes the age distribution of Bitcoin's unspent transaction outputs (UTXOs). This visualization, pioneered by Unchained Capital, shows the cross-section of Bitcoin held in wallets grouped by the age since they last moved, providing crucial insights into market cycles and investor behavior.
Bitcoin HODL waves are a visual representation of the distribution of Bitcoin holdings based on how long they have remained unmoved. Each colored band on a HODL waves chart indicates the percentage of the total Bitcoin supply that was last transacted within a specific time period, ranging from less than a day to over ten years.
Bitcoin HODL Waves show the age distribution of unspent transaction outputs (UTXOs), revealing the holding duration of bitcoins across the entire network. This data provides unprecedented transparency into the behavior patterns of Bitcoin holders worldwide.
This visualization is useful for locating exactly where the market timing is during its long-term oscillations between bull and bear phases. During bull markets, long-term holders often distribute their coins, while bear markets see increased accumulation.
HODL Wave analysis shows the percentage of all bitcoins that have not been moved from one wallet to another for specific time periods, with particular focus on those who have held their Bitcoin for one year or more, indicating strong conviction in the asset.
The upper contours represent supply (old coins that have remained unmoved) while the lower contours represent new demand (coins that have recently shifted), creating a comprehensive view of Bitcoin's economic activity.
Historical analysis shows that during major price movements, significant percentages of Bitcoin change hands - for example, during the 2017 bull run, 20% of Bitcoin in existence was transacted with for the first time in years.
These bands represent recently moved Bitcoin, often indicating:
This category shows Bitcoin held through various market conditions:
Long-term holders represent the strongest conviction Bitcoin investors who demonstrate diamond hands behavior:
Bitcoin that hasn't moved for half a decade or more often represents:
Distribution tops occur when young coins (<6 months) are valued at 80%+ of the value, while long-term holders tend to shrink as the market approaches a blow-off top. This indicates massive distribution from strong hands to weak hands.
Once the top is reached and prices begin to decline, long-term holding bands expand again, reflecting reduced distribution activity. This shows the market transitioning from speculation back to accumulation.
The 1yr HODL wave line has an inverse relationship to price which highlights that long term participants start to sell their bitcoins as the BTC price increases over time, providing clear signals for cycle timing.
Realized Cap HODL Waves provide additional insight by weighting each Bitcoin by its last moved price, showing the economic weight carried by different age cohorts rather than just the quantity of Bitcoin.
By tracking how age bands propagate over time, analysts can identify when coins are aging up through bands versus when older coins are being spent and reset to zero age, providing leading indicators for market movements.
The long-term holders give way to the short-term as price rises, eventually ending the bull market when there is no one left to buy. This relationship between HODL patterns and price provides powerful predictive capabilities.
Bitcoin HODL Waves provide unique insights that traditional financial analysis cannot offer:
Unlike traditional assets, Bitcoin's blockchain provides complete transparency into holder behavior, allowing for unprecedented market analysis.
HODL waves reveal the collective psychology of Bitcoin holders, showing when fear, greed, conviction, and capitulation drive market behavior.
By tracking the flow of Bitcoin between different age cohorts, investors can better time market entries and exits across multi-year cycles.
Understanding holder distribution helps assess market risk and the likelihood of significant selling pressure at different price levels.
Major Bitcoin market events create distinctive HODL wave signatures: