HODL Waves and Coin Age
What are HODL Waves
HODL Waves are a chart that classifies Bitcoin's total supply by the time since each coin was last moved (age). It shows how long each coin has remained stationary since its last transaction.
For example, it visually displays what percentage of all Bitcoin has not moved for over 1 year, or what percentage moved within the last 24 hours.
HODL Waves quantify market participants' "patience." Longer holding periods indicate investors with stronger conviction.
Classification by Holding Period
Age Brackets
| Age Bracket | Classification | Investor Profile |
|---|---|---|
| Less than 1 day | Ultra short-term | Day traders, bots |
| 1 day - 1 week | Short-term | Swing traders |
| 1 week - 1 month | Short-term | Short-term investors |
| 1 month - 3 months | Medium short-term | Medium-term investors |
| 3 months - 6 months | Medium-term | Position traders |
| 6 months - 1 year | Medium long-term | Confident holders |
| 1 year - 2 years | Long-term | Cycle investors |
| 2 years - 3 years | Long-term | Committed HODLers |
| 3 years - 5 years | Long-term | Core HODLers |
| 5+ years | Ultra long-term | Lost or absolute HODLers |
Long-Term Holders (LTH) vs Short-Term Holders (STH)
In on-chain analysis, 155 days (approximately 5 months) is typically the dividing line between Long-Term Holders (LTH) and Short-Term Holders (STH).
- LTH: Held for 155+ days. The market's "strong hands." Less sensitive to price changes.
- STH: Held for less than 155 days. Sensitive to price movements. Higher likelihood of selling.
HODL Waves and Market Cycles
Early Bull Market (Accumulation → Early Uptrend)
- Long-term held coins at maximum proportion
- HODLers who weathered the bear market hold most of the supply
- Short-term coins at minimum proportion
- Interpretation: Weak hands have all left, only strong hands remain. Bottom signal.
Mid Bull Market (Price Surge Phase)
- Long-term held coins start moving (some profit-taking)
- Short-term coin proportion increases as new entrants arrive
- Interpretation: "Wealth transfer" as old coins pass to new participants
Late Bull Market (Overheating Phase)
- Short-term coin proportion increases sharply
- Coins held less than 1 month reach maximum proportion
- Long-term coins move in large volumes (profit-taking)
- Interpretation: FOMO brings new investors rushing in while experienced investors sell. Near the top.
Bear Market (Decline Phase)
- Short-term coin proportion begins declining
- Short-term coins "graduate" to long-term (holding periods extend)
- Interpretation: Declining new investor inflow, investors holding through losses
Coin Days Destroyed (CDD)
Concept
CDD is an indicator calculated as amount of coins moved x number of days those coins were held.
For example, if 10 BTC that was held for 100 days moves:
CDD = 10 BTC x 100 days = 1,000 Coin Days Destroyed
Interpretation
High CDD means long-held coins moved in large volume. This suggests long-term holders may be selling, and when CDD spikes near price highs, it's a strong warning signal.
| CDD Level | Meaning | Market Interpretation |
|---|---|---|
| Very High | Large movement of old coins | Possible LTH selling. Caution |
| Normal | Regular coin movement | Neutral |
| Very Low | Almost no coin movement | Extreme inactivity. Bottom or accumulation phase |
Binary CDD
Binary CDD simplifies CDD by showing 1 if that day's CDD is above the long-term average, 0 if below. Consecutive 1s signal that long-term holder selling behavior is continuing.
LTH-NUPL and STH-NUPL
LTH-NUPL and STH-NUPL apply the HODL Waves concept to NUPL.
LTH-NUPL (Long-Term Holder Unrealized Profit/Loss)
Shows the unrealized profit/loss status of long-term holders.
- LTH-NUPL > 0.7: Long-term holder profits maximized. Large profit-taking possible.
- LTH-NUPL < 0: Even long-term holders in loss. Extreme bear market.
STH-NUPL (Short-Term Holder Unrealized Profit/Loss)
Shows the unrealized profit/loss status of short-term holders.
- STH-NUPL > 0: Recent buyers in profit. Market stable.
- STH-NUPL < 0: Recent buyers in loss. Panic selling possible.
STH-NUPL falling below 0 has similar meaning to a support test. Since price has dropped below recent buyers' average cost, a bounce from this level confirms support.
Proportion of Bitcoin Held 1+ Year
One of the most frequently referenced HODL Wave metrics is the proportion of Bitcoin that hasn't moved for over 1 year.
Historical Patterns
- Early bull market: 1+ year held proportion at 60-70% maximum
- Bull market peak: This proportion decreases to 40-50% (old coins being sold)
- Bear market bottom: Proportion begins increasing again
This pattern is very intuitive. When many people hold for long periods, there are fewer sellers, creating a foundation for price increases. When long-time holders start selling, supply increases, creating a foundation for price decline.
Combining with Other Indicators
HODL Waves + Exchange Reserves
When exchange reserves decrease while long-term holding proportion increases, it's a strong accumulation signal that coins are leaving exchanges for cold storage long-term holding.
HODL Waves + SOPR
When long-term coins move while SOPR shows high values, it means long-term holders are selling while realizing large profits. This is a typical characteristic of cycle tops.
Summary
HODL Waves are a powerful tool for determining cycle position through Bitcoin's holding period distribution. High long-term holding proportion indicates accumulation phase/bottom, while sharply increasing short-term coin proportion indicates overheating/near top. Observing actual long-term holder behavior alongside CDD can capture early signals of market turning points.
Next article: Supply Distribution and Whale Wallets - Who Holds How Much