Introduction
Bitcoin Coin Age Cohorts—commonly referred to as "HODL Waves"—illustrate the percentage of BTC supply that remains inactive over specific time periods. This on-chain metric reveals behavioral trends among long-term holders (LTHs) and short-term holders (STHs), offering insights into market sentiment and accumulation/distribution cycles.
How HODL Waves Work
Key Concepts
- Coin Age Reset: When a UTXO (unspent transaction output) moves, its age resets to zero (marked in red).
- Aging Process: Idle coins progress through predefined age bands (e.g., <1 day, 1–7 days, 1–3 months, etc.).
- Supply Percentage: Each cohort represents the proportion of total BTC supply dormant for its respective timeframe.
Pseudocode Breakdown
For each day in blockchain:
Define cohort ranges (e.g., [<1d, 1d-7d, 7d-14d, ...])
For each cohort range:
Calculate sum of UTXOs with ages within the range
Output: (day, cohort range, total satoshis)Technical Insights
Unadjusted vs. Adjusted Data
- Current Metric: Uses unadjusted transaction data (raw UTXO movements).
- Future Development: Adjusted variants accounting for privacy techniques like CoinJoin are underway.
Market Sentiment Indicators
- Spikes in Red Cohorts (<1d): Signal increased selling pressure or wallet reorganizations.
- Growth in Older Cohorts (1y+): Suggests accumulation by LTHs.
👉 Explore real-time HODL Wave charts
Practical Applications
For Investors
- Identify Accumulation Phases: Prolonged growth in 6m–2y cohorts may precede bullish trends.
- Spot Distribution: Sudden shrinkage in older cohorts indicates LTH profit-taking.
For Researchers
- Correlate cohort shifts with macroeconomic events (e.g., halvings, regulatory changes).
FAQs
Q1: Why do coin ages reset when moved?
A: Bitcoin’s design treats any UTXO movement as a new transaction, erasing prior ownership history.
Q2: How often is this data updated?
A: Daily at 00:00 UTC.
Q3: Can HODL Waves predict price movements?
A: They reflect holder behavior but require contextual analysis with other metrics (e.g., exchange flows).
Q4: What’s the difference between "adjusted" and "unadjusted" data?
A: Adjusted data filters noise from privacy techniques; unadjusted includes all on-chain activity.
Limitations & Disclaimers
- Beta Status: Metrics may undergo refinements.
- Not Financial Advice: Always conduct independent research.
👉 Learn more about Bitcoin on-chain analytics
Conclusion
HODL Waves provide a unique lens into Bitcoin’s supply dynamics, helping stakeholders decode holder strategies and market cycles. By tracking these cohorts, you gain actionable insights beyond price charts alone.