Bitcoin HODLer Accumulation Is Increasing
Bitcoin HODLer Accumulating
We look to be headed toward a trend of increased Bitcoin HODLer accumulation following a local bitcoin price top.
A key on-chain metric that we’ve discussed before, and that we will cover today, is the Realized HODL (RHODL) Ratio. The ratio uses realized cap HODL waves, which takes the original HODL Wave metric and weights the UTXOs in each age band by their realized price. Specifically, the Realized HODL Ratio uses the one-week and the one-to-two-years Realized Cap HODL Age bands.
For a more in-depth overview of this metric, check out The Daily Dive: HODL Waves And Realized HODL Ratio.
By using this metric, we can better understand what’s happening with younger coins versus older coins. As younger coins become more dominant and the ratio rises, long-term holders hold less of the realized market value. As the ratio falls, long-term holders hold more market-realized value compared to younger coins. An overheated market would show much higher younger coin dominance.
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Examing Crypto’s Past
In the previous bitcoin tops in 2021, we didn’t see the rise of younger coins relative to older coins like previous cycles. We saw the RHODL Ratio rise throughout the year, but it never became heated or overheated like the 2016 cycle. This can be due to a changing cycle, a more maturing market or the fact that we didn’t see the significant wave of new demand, younger coin buying, seen in past cycles.
The bitcoin price, weighted by the RHODL ratio, heavily affected by the increasing momentum of Bitcoin HODLer mentality.
Over the last month, we’ve seen a significant increase in the HODL Waves and Realized Cap HODL Waves one-to-two-year age bands. More coins are aging into this band and are taking up more economic weight in the RHODL Ratio calculation as more long-term held supply comes into the market. As a result, the RHODL Ratio is right around its 50th percentile between a neutral and cooled state.
Historically, we’ve seen the one-to-two-years age band peak around 50% of supply, while it’s currently at 12.93%. We look to be headed into a trend of increased holder accumulation post a local bitcoin price top. As accumulation continues and older coins age in, the RHODL Ratio falls and makes bitcoin a more attractive historical buy.
Realized cap HODL waves for one to two years, and one week to one month
Credit: Bitcoin Magazine