The recovery in the cryptocurrency market is underway, with Bitcoin (BTC) price rising by 28.5% in October. However, the most important question is whether the 2023 increase marks the beginning of a new growth market or a period of decline after the market hit bottom.
Online analysis provides insights into the stages of the Bitcoin and cryptocurrency market cycle we are currently experiencing. One of the interesting indicators is the HODL Wave, which shows that nearly 90% of the BTC supply hasn’t moved in the last 3 months.
Moreover, many late-cycle investors from the previous cycle have turned into long-term hodlers (LTH). They haven’t realized profits around the current all-time high (ATH) of $69,000 since November 2021. This is why they are now holding onto their diamond hands and waiting to sell until the cryptocurrency market experiences a price surge. In previous cycles, their actions marked the beginning of a mature bull market.
The HODL Wave is an on-chain indicator that aggregates all age groups of the active supply of Bitcoin. Each color band represents the percentage of Bitcoin supply that has moved recently in the specified time frame. The closer to red, the younger the coins. The closer to purple, the older the coins.
It’s noteworthy that over time, a certain coin that remains in HODL (not moved) will change color to purple. When a coin is moved, the HODL Wave immediately conditions the youngest red band, identifying recent transfers in hours and days.
A very interesting situation that the HODL Wave is currently displaying applies to all age groups over 3 months. On the chart of long-term hodlers, from yellow to purple, we see a new all-time high (ATH). Currently, there are up to 89.1% of the BTC supply not moved, traded, or changed ownership.
In the previous cycle, it was 83.5% right before the cycle bottomed in December 2018. Conversely, in the two previous cycles, the supply not moved for over 3 months reached an ATH of 85.6% in July 2015.
What’s intriguing is that this is happening despite the clear recovery in the cryptocurrency market. However, most investors are still in HODL mode due to the expected approval of the Bitcoin ETF spot, likely by late 2023 or early 2024. The upcoming Bitcoin halving event, which has historically acted as a catalyst for a mature growth market in the cryptocurrency space, is also not insignificant.