Data source: Glassnode
Actual Market Capitalization Age Distribution Realized Cap HODL Waves
Active supply zones are measured as a proportion of the realized dollar value (economic weighting) of the realized cap, showing how long Bitcoin was held before it was sold, with different colors used to differentiate the length of time. All Bitcoins have an age: not when they were first mined, but when they were last used in a transaction.
Realized Cap HODL Waves presents a macro view of the age distribution and economic weight of the token supply.The thickness of each age group is calculated by calculating the thickness of each age層Total realized value of tokens (realized = changed hands)determined as a percentage of the realized cap.This reflects the changes induced by holding and consumption behavior.
For example, if an address has held Bitcoin for 6 months, it will be placed in the light orange zone representing the 3-6 month period, and when the address achieves a profit or loss (sells Bitcoin), the Bitcoin will be switched to the 24-hour zone, which is the dark red band at the bottom.
How to analyze it?
The thickness of the HODL band indicates the proportion of the total token supply that is categorized into that age group:
As more and more coins move from younger ages (warm colors) to older ages (cool colors), accumulation and HODLing behavior will result in maturation of the coins (young to old), which suggests stronger long-term conviction in accumulating and holding the assets and an associated reduction in the supply of the liquidity cycle.
Selling an older Bitcoin will result in an increase in the proportion of warm bands, as the coin has by this time moved into the hands of short-term retail investors. This also suggests an increase in the liquidity cycle supply as older tokens are reactivated after a period of dormancy, reducing the long-term conviction to hold the asset.
Spending young coins will reclassify them as young coins and immediately affect the number of young age groups.
The maturation of young coins into old coins is always delayed because the coins reach the lower limit of the old age band before they are reclassified into the new HODL band.
Indicator Signal
- Lost or ancient coins (dark cool colors):Coins older than 5 years are rarely used and in many cases are considered either lost or discounted in the free circulation supply. Over time, these age bands tend to decline steadily, as their realized value is usually sold at a much cheaper price, despite the fact that UTXO usually holds a large number of BTC tokens.
- Old coins (cold colors):Coins that have been in use for more than 1 year to 5 years are usually considered to be owned by holders/smart investors. These entities are often observed to accumulate cheap coins during bear markets, hold them for long periods of time, and then sell them for a hefty profit when a bull market arrives.Older ribbons tend to fluctuate with market cycles and thin as tokens are consumed. Older ribbons tend to fluctuate with market cycles, expanding as they accumulate and thinning as tokens are consumed. These bands can be used to identify bearish and bullish market cycles as they expand and contract respectively.
- Young Token (warm color):Tokens less than 6 months old are usually considered young and they also make up the majority of daily trading volume. Many young coins are held by speculative short-term investors/traders and are most likely to be re-spent in response to market fluctuations. These ribbons tend to oscillate inversely with older coins, expanding as older coins are spent in bull markets and contracting as younger coins become dormant and mature during bear markets and accumulation.
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