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The Amount of Bitcoin Holder Accumulation is Increasing

Following a local bitcoin price top, we appear to be on the verge of a trend of increased BTC holder accumulation.

The Realized HODL (RHODL) Ratio is an important on-chain metric that we’ve discussed previously and will go over again today. The ratio employs realized cap HODL waves, which take the original HODL Wave metric and weight the UTXOs in each age band according to their realized price. The Realized HODL Ratio, in particular, employs the one-week and one-to-two-year Realized Cap HODL Age bands.

Check out The Daily Dive: HODL Waves And Realized HODL Ratio for a more in-depth look at this metric.

We can gain a better understanding of what is happening with younger coins versus older coins by using this metric. Long-term holders hold less of the realized market value as younger coins become more dominant and the ratio rises. Long-term holders have more market-realized value than younger coins as the ratio falls. In an overheated market, younger coins would have a much higher dominance.

Unlike previous cycles, we did not see the rise of younger coins relative to older coins in the previous bitcoin tops in 2021. The RHODL Ratio increased throughout the year, but it never became heated or overheated, as it did in the 2016 cycle. This could be due to a changing cycle, a maturing market, or the fact that we did not see the significant wave of new demand, or younger coin purchasing, seen in previous cycles.

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We’ve seen a significant increase in the HODL Waves and Realized Cap over the last month. HODL Waves has age bands ranging from one to two years. As more long-term held supply enters the market, more coins are ageing into this band and gaining economic weight in the RHODL Ratio calculation. As a result, the RHODL Ratio is right around the 50th percentile in the range between neutral and cooled.

Historically, the one-to-two-years age band has peaked at around 50% of supply, while it is currently at 12.93%. Following a local bitcoin price top, we appear to be on the verge of a trend of increased holder accumulation. As accumulation continues and older coins mature, the RHODL Ratio decreases, making bitcoin a more appealing historical buy.

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Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

 

 

 

 

 

 

 

 

 

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