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Description

The BTC HODL Wave leverages on-chain data to categorize Bitcoin holdings by their age, ranging from less than one day to over five years. This visualization provides insights into investor behavior by illustrating shifts in holding durations—longer holding periods often reflect bullish sentiment, while shorter holding periods may indicate bearish tendencies. Historically, patterns within the HODL Wave have correlated with key market cycles and major price movements. For example, an increase in the proportion of long-held Bitcoin frequently precedes market peaks. This metric serves as a valuable tool for investors and analysts seeking to understand market dynamics and inform strategic decision-making. The BTC HODL Wave is updated on a monthly basis to reflect the latest holding period distributions.

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Use Case

Traders often leverage the Hodl Wave to pinpoint short-term trading opportunities by monitoring shifts in holding patterns. Analysts utilize the Hodl Wave to gauge broader market sentiment and its potential impact on Bitcoin’s price stability and future movements. Researchers interested in cryptocurrency market economics and behavior utilize the Hodl Wave to study accumulation, distribution, and retention patterns among Bitcoin holders.

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Methodology

The Bitcoin HODL Wave methodology involves a detailed analysis of transaction outputs and inputs across the blockchain:
  1. Transaction and UTXO Analysis
    All Bitcoin transactions and their corresponding Unspent Transaction Outputs (UTXOs) are examined.
  2. Input-Output Matching
    Transactions are cross-referenced by matching outputs with inputs to identify spent outputs, i.e., those outputs that have subsequently been used as inputs in later transactions.
  3. Age Calculation
    For each spent output, the elapsed time between when the output was created and when it was spent is calculated.
  4. Age Bucket Categorization
    These time intervals are grouped into predefined age buckets representing different holding periods, enabling the visualization of how long coins have been held before being moved.