The 1-Year HODL Wave indicator calculates the percentage of Bitcoin that hasn't moved in wallets for over a year and displays it as a red line. When this percentage increases, it means that old Bitcoin holders are holding and waiting for a bigger rise. When it decreases, it indicates that some people have started to sell or put new liquidity into the market.

How we understand the lines

The yellow line shows the Bitcoin price movement over the years.

The 1-Year HODL Wave indicator shows the behavior of long-term holders, meaning those who have been holding Bitcoin for a year or more.

Why this indicator is important

It measures market confidence; an increase in the red line = belief from the masters that the price will continue to rise → Bitcoin supply in the market decreases → buying pressure increases.

Its decline = old holders are taking profits or are afraid of a correction → Bitcoin supply increases → the price may drop.

It puts a radar on the market; it not only measures the price but also the intentions of the whales 🐳. Whale behavior tends to be a leading indicator for the market more than most technical indicators.

Analysis of the current situation

The 1-Year HODL Wave has started to gradually decline.

The indicator has fallen from the highest peak it reached at the end of 2023 and the beginning of 2024. This means that old wallets have started to move, and people who have held Bitcoin for a year or more have started to sell.

The message here is that there is a kind of "distribution" happening, and this is a usual step before any major correction, especially if the selling comes from whale wallets.

Current Bitcoin price

The price is still in an upward trend and is playing around a historical peak. The market shows clear buying strength, especially from new investors entering, which keeps the rise despite the indicator decreasing.

But the market currently is not supported by old holders but by new incoming liquidity, and this may continue for a while... but as soon as the new liquidity dries up, the price may collapse suddenly.

Potential scenarios

The positive scenario

New liquidity continues to be massive, and the indicator starts to stabilize or reverse direction. In this case, we might break a historical peak and see completely new numbers.

The negative scenario

The HODL indicator is completing a sharp decline + market liquidity is decreasing. This means the beginning of a painful correction phase similar to the end of 2017 or mid-2021.

Monitor the indicator weekly to see the beginnings of selling from whales and relate it to other indicators like NUPL or SOPR. NUPL shows us net unrealized profits/losses and SOPR analyzes whether people are selling at a profit or a loss. Don't be stubborn; the market rewards those who read it correctly, not those who have hope.

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