What Are HODL Waves?
HODL Waves are visual representations of Bitcoin's supply distribution based on how long coins remain inactive in wallets. These bands categorize the percentage of total Bitcoin supply that hasn't been moved within specific timeframes:
- 1–7 Days: Coins held for ≥1 day but <7 days
- 7–30 Days: Coins held for ≥7 days but <30 days
- 1–3 Months: Coins held for ≥1 month but <3 months
- 3–6 Months: Coins held for ≥3 months but <6 months
- 6–12 Months: Coins held for ≥6 months but <1 year
- 1–2 Years: Coins held for ≥1 year but <2 years
- 2–3 Years: Coins held for ≥2 years but <3 years
- 3–5 Years: Coins held for ≥3 years but <5 years
- 5–7 Years: Coins held for ≥5 years but <7 years
- 7–10 Years: Coins held for ≥7 years but <10 years
- >10 Years: Coins held for over a decade
Key Holder Classifications
- Long-Term Holders (LTH): Coins inactive for >6 months (accumulated bands)
- Short-Term Holders (STH): Coins inactive for <6 months
Why HODL Waves Matter for Bitcoin Analysis
1. Market Sentiment Indicators
- Increasing LTH bands suggest strong conviction among investors.
- Rising STH activity may indicate short-term trading or panic selling.
2. Supply Shock Potential
When large portions of supply enter long-term bands (e.g., >2 years), available liquid Bitcoin decreases, potentially driving price appreciation.
👉 Discover how supply dynamics impact Bitcoin's value
3. Historical Cycle Patterns
- Bull markets often see STH bands expand as new buyers enter.
- Bear markets typically show LTH accumulation as weak hands exit.
Interpreting Age Bands
| Band | Typical Behavior | Market Phase Correlation |
|---------------|-------------------------------------------|---------------------------|
| <6 Months | High volatility | Price peaks/crashes |
| 6–12 Months | Early accumulation | Post-crash recovery |
| 1–2 Years | Strategic holding | Bull market formation |
| >2 Years | Strong conviction ("diamond hands") | Macro bull cycles |
FAQs About HODL Waves
Q: How accurate is HODL Wave data?
A: On-chain metrics provide objective movement records, but wallet clustering techniques improve accuracy in attributing ownership.
Q: Do older coins always mean bullish signals?
A: Not necessarily. If >10yr coins suddenly move, it may indicate lost coins being spent or early miners cashing out.
Q: How do exchanges affect HODL Waves?
A: Exchange wallets often show high STH activity since traders frequently move funds. Cold storage wallets dominate LTH bands.
👉 Learn advanced Bitcoin on-chain strategies
Q: Can HODL Waves predict price bottoms?
A: Historically, LTH dominance during bear markets precedes bullish reversals, but should be combined with other indicators.
Practical Applications for Investors
- Spotting Accumulation Phases: Rising 1–2yr bands often signal smart money entering.
- Avoiding FOMO: Spikes in <1mo bands may warn of overheated markets.
- Long-Term Planning: Tracking >5yr bands helps assess Bitcoin's hardening as a store of value.
Note: Always conduct independent research before making investment decisions.
This analysis demonstrates how HODL Waves serve as a powerful lens into Bitcoin holder behavior, offering actionable insights for both traders and long-term investors. By monitoring these on-chain patterns, you can better navigate crypto market cycles with data-driven confidence.