What Are Bitcoin HODL Waves?
HODL Waves (or "Ondas HODL") is a Bitcoin blockchain visualization that groups circulating bitcoins into age bands. It uses color-coded waves to show how long holders retain their coins over time, revealing market trends.
Key features:
- Tracks the supply distribution of Bitcoin by age.
- Normalizes data, scaling the Y-axis to 100% to represent total market supply.
- Highlights shifts in holder behavior during bull/bear cycles.
What Do HODL Waves Reveal?
This metric uncovers market psychology:
- Spikes in younger age bands (red/orange) indicate FOMO buying—new investors entering near price tops.
- Declines in older bands (blue/green) suggest long-term holders ("Smart Money") selling into strength.
- Historically, rapid growth in short-term holdings precedes market corrections.
Example: When Bitcoin’s price surges too quickly, older coins move to younger wallets, signaling potential overvaluation.
How Are HODL Waves Calculated?
The chart analyzes UTXO (Unspent Transaction Output) data, categorizing coins by last movement:
| Age Band | Color Indicator |
|--------------------|------------------|
| <24 hours | Bright red |
| 1 week–1 month | Orange |
| 1–3 years | Light blue |
| 5+ years | Dark purple |
(Full list: 24h, 1d–1w, 1w–1m, 1m–3m, 3m–6m, 6m–12m, 1y–2y, 2y–3y, 3y–5y, 5y–7y, 7y–10y, 10y+)
Practical Uses of HODL Waves
Identifying Market Cycles:
- Long-term holders (LTHs) selling = Possible cycle top.
- Short-term holders (STHs) accumulating = Early bull phase.
1-Year HODL Wave:
- Focuses on coins held >1 year.
- Inversely correlates with price; LTHs sell as BTC rallies.
RHODL Ratio:
- Combines HODL Waves with Realized Cap to detect euphoria.
FAQ Section
Q: How accurate are HODL Waves for timing the market?
A: They’re a macro indicator—best for identifying broad trends, not precise entries/exits.
Q: Why do older coins matter more?
A: They represent "conviction money." Moves by these holders often signal major shifts.
Q: Can HODL Waves predict Bitcoin’s price?
A: Not directly, but they highlight overbought/oversold conditions based on holder behavior.
👉 Explore live HODL Wave charts
Key Takeaways
- HODL Waves = Market sentiment thermometer.
- Watch older bands for "Smart Money" cues.
- Combine with other on-chain metrics (e.g., RHODL Ratio) for stronger insights.
Note: This is not financial advice. Always conduct independent research.
By analyzing HODL Waves, investors gain a data-driven edge in navigating Bitcoin’s volatile cycles. For deeper dives, review the original research by Unchained Capital.
(Originally conceptualized by Dhruv Bansal in April 2018.)