HODL means “buy and hold” in crypto community. Yes, it’s a wrong spelling of “hold” but it has a cool story if you want to read on how it originated. Today we will analyze two sets of data: Bitcoin addresses that HODL bitcoins for more than a year against Bitcoin prices.
This chart shows bitcoin data starting from 2011 when bitcoin price was 6 cents. While blue lines is the bitcoin price, orange line represents 1 year plus HODLing BTC addresses.
As we can see, in 2011, the peak was 32% BTC addresses who were HODLing bitcoin for more than 1 year and bitcoin price was $29 at peak. 1Y+ HODL wave did only decrease to 29% when BTC reached $29 peak. We can take this as starting data instead of analyzing to fit in our model since only few people knew bitcoin in 2011.
Between 2012-2014 cycle, we can see 1Y+ HODL wave peaked at 48% and started to decline exactly when bitcoin price touched $29. People who bought bitcoin in 2011 at around $29 kept bitcoin until it reached the same price $29. This is common trading psychology of every human. As the bitcoin price kept going up from $29 to $1128, people were unloading their bitcoins and 1Y+ HODL wave nearly bottom at around 38%.
Between 2014-2016 cycle, bitcoin was in bear market. Bitcoin price declined from $1128 to $200 while we can see 1Y+ HODL wave increased from 38% to 61%. This also fits our analysis of human nature. Why would people sell bitcoin in loss? People would hope bitcoin price will bounce back in future.
When the bitcoin price reached around $1128 (which was previous cycle high), 1Y+ HODL wave started to decline. We can see 1Y+ HODL wave bottomed at 41% when Bitcoin was peaked around $15,000-$20,000 in 2018 January.
Based on these market cycles, we can clearly predict what will happen next in bitcoin market.
In every cycle, 1Y+ HODL wave is creating a new higher high when bitcoin price crosses previous cycle’s all time high and it also creates a higher low.
1st cycle -> its high was 32% and low was 28%
2nd cycle -> its high was 48% and low was 38%
3rd cycle -> its high was 61% and low was 41%
4th cycle -> * we predict 1Y+ HODL high to be more than 61% when bitcoin price nears previous all time high which is 20k *
|Timestamp||Bitcoin Price||1Y+ HODL Wave|
This table and our analysis show 1Y+ HODL wave will soon make a new high and that will be 1Y+ HODL peak of this cycle – and this will happen near bitcoin price of $20,000.
Will you be buying bitcoin when everyone starting unloading at 20k? Decide now!