Bitcoin holders are known for their reluctance to sell their bitcoin. Using on-chain data, analyst and trader Willy Woo said that so-called ‘hodl-waves’ are growing stronger as bitcoin’s price ascends, saying that this is measurably true and not nebulous theorising.

In Brief

  • Bitcoin holders are on the rise during this ‘HODL wave’, according to a prominent bitcoin analyst.
  • Holders are refusing to sell their bitcoin in greater numbers than in previous cycles.
  • Bitcoin fell as much as 17% on during the blood bath.

According to analyst Willy Woo, investors are “not willing to sell as price climbs”, creating a self-perpetuating feedback loop that serves to drive price higher. The analyst calls this a characteristic unique of this bull market, calling it a notion of ‘reflexivity’.
“This bull market is quite unique; reflexivity is INCREASING. Contrary to belief, Bitcoin was NOT very reflexive during past bull runs, old hands would sell into price rises”, he said in a tweet.

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This finding is also visibly measurable using on-chain metrics. Since bitcoin is an open ledger of publicly available information, ‘reflexivity’ can be measured.
This is done by measuring the age contours of coins, i.e. HODL waves, which shows old hands (old wallets) selling their coins.
Another way to measure this phenomenon is by measuring the market capitalisation climb per dollar of net capital invested, per the above chart.
In effect, this is another way of measuring bitcoin UTXOs (Unspent outputs) in profit i.e. the percentage of coins which were bought at a lower price than the current market value.

Bitcoin enters a corrective period

Despite these macro-bullish factors, bitcoin entered into a corrective trajectory on Thursday, dipping as much as 17% on the day to $16,200.
In some cases, this turn of events came as a wrecking ball for some investors, with liquidations matching those of of black Thursday during the covid-induced market sell-off. The $800 million in long liquidations has since calmed down as the market licks its wounds.
The cryptocurrency is currently trading at $16,750, with a market cap of $310 billion at the time of writing, according to data from CoinGecko.

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