Once in a while we dive into the Bitcoin blockchain to uncover interesting data. This time we do that with the HODL Waves, a popular on-chain indicator that tells us which part of the cycle Bitcoin is in. Before we dive into the data and make statements about a possible bull market, let’s briefly review the concepts of this introduction.
Basically, the HODL Waves show us how long all of the Bitcoin currently in circulation has been in the same place. What you often see during a bull market and especially around the peak is that a large percentage of all Bitcoin has recently switched addresses. This is because people buy in during the bear market, then hold on for years to sell some of their Bitcoin in the bull market during the hype.
The chart above shows exactly how this works. Each orange/red peak is a moment in history when the Bitcoin price was on a bull run. The peak has now passed, but based on history we have also hung around the bottom long enough. It may just be that in the year after the next halving, which is scheduled for March 2024, a new red peak will appear in the chart.
What else do we see?
What we also see from the HODL Waves is that more and more coins are moving towards the more calm and blue / purple colors. This means that there are more and more Bitcoin that remain in the same place for a very long time. In other words, there are more and more hodlers who have no intention at all of getting rid of their Bitcoin in the first place.
Ultimately, those are the people Bitcoin needs to break through as the most important currency on Earth. At the moment we can certainly not speak of that yet and the US dollar is still the absolute king. But also remember that Bitcoin has only been around for 14 years and there is still plenty of time to take the throne.