Bitcoin HODling: What do Realised Cap HODL waves say about it?

• Old Bitcoin holders are holding a maximum market value of BTC with solid conviction
• Middle-aged BTC HODLers are holding considerable value but with stress
• Young Bitcoin owners want to make quick profits, so they are selling to strong hands

JAIPUR (Coinchapter.com) – Bitcoin has been around for more than 12 years now, with multiple generations of investors (based on HODLing behavior) defining its market direction.

Data from Glassnode suggests that the top cryptocurrency’s rally to $20,000 in late 2017 caused a massive selloff amongst 2014-15 era HODLers. Almost all coins got distributed to new buyers in 2018. However, only 2.2% of Bitcoin HODlers held onto their coins.

Old Coins aged 1y+

Similar to 2017, we saw a period of distribution into bull market strength in Q1.

However, the thickness of these waves remains 4.9x larger than the 2017 top, with over 11.3% of the Realised Cap made up of 1y+ coins

Old Hands are HODLing a lot more value
2/6 pic.twitter.com/IFNxBPZWEv

— glassnode (@glassnode) July 8, 2021

The new Bitcoiners started collecting cheap BTC at prices below the $13,000 – $14,000 price range after accumulation peaked in July 2019. What followed later was another round of selloff.

Also Read: Bitcoin fails to attract new whales as BTC risks decline below $30K

But it was not as severe as the massive dumping from January 2016 to January 2018. Selling momentum plateaued after July 2019, and accumulation took off until January 2021. Then, as BTC prices started skyrocketing, distribution resumed again. But compared to 2.2% of Bitcoin holders left after December 2017, 11.6% were left post the $65,000 peak this year.

Also Read: Are whales accumulating Bitcoin between $30K and $40K?

“Middle-Aged” Holders In Stress

After the veterans, some rookies became Bitcoin holders within the 3 months to 12-month timeframe. The bull-market period when BTC rallied from $9000 to more than $60,000. Data implies that these BTC holders historically had sharp accumulation and selloff trajectories.

Swelling volumes suggest they are holding on to their Bitcoins, but since they bought during the upside, their hedge against the downside risk is less. They may soon have to offload some part of their BTC holdings to cover capital costs, initial capital investment, etc.

Middle Age coins 3m to 12m

These coins were bought between $9k and $60k and represent bull market buyers

Their holdings are swelling suggesting a fairly large volume of are holding on

These holders are also the most likely to be underwater and become sell-side supply
2/6 pic.twitter.com/OSwVb0zFVY

— glassnode (@glassnode) July 8, 2021

New BTC Holders Nothing But Quick Profit Seekers

Bitcoin holders who are new to the game and started accumulating BTC just 3 months back are doing so to earn quick profits. Their buying and holding behavior changes sporadically with prices.

“Young BTC holders” bought and sold off soon. Eventually, with them relinquishing control of their BTC, owing to changing market trends, the proper accumulation phase kicks off where older Bitcoin holders buy to hold for a more substantial rally amid the volatility.

Young Coins < 3m

These waves will spike as old coins are distributed and change hands to newer buyers, and decline when accumulation is in play

Across the board, accumulation appears to be the more probable scenario, however as for bearish trends, it takes time to play out
4/6 pic.twitter.com/yofJmWy8Ku

— glassnode (@glassnode) July 8, 2021

The significant difference between middle-aged Bitcoin holders and their young counterparts is the value of BTC holdings. BTC buyers falling in the 3 months to 12-month timeframe have also accumulated during the bull runs, but their holding sizes are much more significant than young Bitcoiners.

Bullish And Bearish Vibes

Overall the Bitcoin holding value of “old coiners” increasing or “swelling” as Glassnode data suggests would point to a bullish trend since experienced holders can navigate harsh market conditions such as extreme downturns.

The declining number of “youngcoiners” is a desirable condition for bullishness.

However, on the flip side, if the Bitcoin holdings value under youngcoiners increases substantially, the conditions would point to a super-bearish market because newbie BTC holders don’t have much skin in the game and would selloff at the first sign of any dip in prices.