90% of Bitcoin (BTC) supply HODL for 3 months

In October, the price of Bitcoin (BTC) rose by 28.5%, recovery is underway in the cryptocurrency market. However, the most important question is whether the 2023 rise is already the beginning of a new bull market or a period of unwinding after the market low.

The analysis of the chain gives us a hint about the cycle levels of the Bitcoin and cryptocurrency market. One of the more interesting indicators is the HODL wave, according to which almost 90% of the BTC supply has not moved in the last 3 months.

Additionally, many latecomers from the previous cycle have shifted to long-term hodelers (LTHs). Since November 2021, they have not been able to profit from the current all-time high (ATH) around $69,000.

That's why they're holding onto their diamond holdings and waiting to sell until the cryptocurrency bull market ends for good. In previous cycles, it was their movement that signaled the start of a bull market.

The HODL Waves indicator has reached the ATH of over 3-month supply of BTC

HODL Waves is an on-chain indicator that compiles all active supply age bands or so-called HODL waves. Each colored band shows the percentage of existing Bitcoins that have moved in the most recent period. When the color is close to red, small coins are transferred. The closer to wine, the older the coins.

It is worth noting that over time, the coin that remains in HODL mode (not transferred) will change its color to purple. When coins are transferred, the HODL Waves indicator immediately qualifies for the small red band, which determines transfers during the last hours and days.

Currently HODL Waves shows the most exciting trend that works for all age groups above 3 months. On the long-term holders' bands chart – from yellow to purple – we see a new all-time high (ATH). Currently, up to 89.1% of the BTC supply does not move, trade and change hands.

In the previous cycle it was 83.5% before the cycle bottomed out in December 2018. In contrast, two cycles ago the supply, which had not moved for more than 3 months, reached its historical ATH of 85.6% in July 2015.

Interestingly, this is happening despite the apparent recovery in the cryptocurrency market. However, as reported by BeInCrypto, most investors remain in HODL mode due to the approval of the upcoming Bitcoin ETF space, which is expected in late 2023 or early 2024. The upcoming halving of Bitcoin, which has led to a bull market that has matured in history. The cryptocurrency sector is not so easy.

ATH was noted by popular chain analyst @DylanLeClair_ on the HODL Waves chart over 3 months ago. He suggested that long-term investors would hold on to their coins in anticipation of a rise in prices. Then he wrote:

“Wall Street hodlers really have to come up with this stuff to get them to part with their coins.”

Confirmed cap HODL waves indicate the end of the accumulation phase

Another way to describe the HODL Waves indicator is called Realized Cap HODL Waves. This is simply our indicator divided by the value obtained. The latter is determined by actual market capitalization divided by current supply.

In the Realized Cap HODL Waves chart below, we can see that, historically, a mature bull market has seen a significant increase in BTC coins in the red and orange age bands. Conversely, a bear market is characterized by an increasing dominance of yellows and a decline in reds.

However, the age of one HODL wave is particularly important in determining the transition from a bear market to a bull market and the end of a long-term stock. This is a light green band. Names coins that will remain inactive for 2-3 years.

These investors were late to buy in the previous bull market, did not take profits and held BTC throughout the bear market and stocks.

Delayed investors key to mature bull market

Now if we isolate just this group of HODL waves, we can see that its behavior signals the beginning of a mature bull market. Well, the behavior of the owners of these coins in the previous two cycles was very similar.

The increase in holdings in the 2-3 year band (blue arrows) occurred after the accumulation phase ended. This one follows the Bitcoin price (red rectangle) macro. This group reached multi-month highs as BTC price slowly climbed and entered a mature bull market (green arrow).

Finally, almost all 2-3 year old HODL waves sold their assets (red arrows). This process, which lasted for several weeks, was previously an indicator of the increase in the price of BTC twice.

Currently, the surge in 2-3-year tenures we've seen since early 2023 may be the first part of that pattern. If the green band now holds, BTC price may continue the slow climb typical of previous bull markets.

On the other hand, if hodlers in the 2-3 year band start selling in favor of short-term holders, this will be a strong indicator of the maturity level of the final, kriptovalyutnogo bull market.

Click here for BeInCrypto's latest crypto market analysis.