There are numerous metrics that can be used to determine cycle tops and bottoms, but realized cap HOLD waves are rarely mentioned among them. The metric, also known as HODL waves, represents the sum of all active supply age bands.
Each colored band in the chart below represents a percentage of all circulating that was last moved within a specific time frame, weighted by its realized price.
LTHs, which are defined as users who have owned Bitcoin for at least six months, are typically the ones who form strong support for market cycle bottoms.
LTHs are regarded as “smart money” in Bitcoin markets and are frequently seen accumulating during bear markets.
When a bull market begins, LTHs are the ones who distribute the accumulated Bitcoin and reap the majority of the profits.
This theory is strongly supported by on-chain data. The graph above clearly shows that whenever Bitcoin reached a new all-time high (ATH), LTHs sold off their holdings. LTHs are the hodlers of last resort during every cycle bottom, providing strong support.
This claim is supported further by Glassnode’s analysis of long and short-term holder supply in profit and loss.
The chart below shows that 80 percent of Bitcoin’s supply is held by LTHs, which are highlighted in blue. The remaining 20% of supply is held by short-term holders (STHs) and is denoted in red.
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