Realized Cap HODL Waves is a variant of HODL Waves that weighs active supply bands by their realized USD value (economic weight) as a proportion of the Realized Cap.

The distinction between HODL waves and Realized Cap HODL waves may be though of as follows:

• HODL waves consider the relative proportion of BTC supply in various age brackets to the circulating BTC supply.

  • A 1y-2y age bracket with a value of 5% indicates that 5% of all coins are aged between 1y and 2y.

• Realized Cap HODL waves consider the economic weight (USD realized value) of the coin supply in various age brackets, relative to the Realized Cap (total realized value of coin supply).

  • A 1y-2y age bracket with a value of 5% indicates 5% of the Realized cap USD value is derived from coins aged between 1y and 2y.

The chart below presents a view where all coins older than 6 months are turned off making the proportion of young, recently moved coins stand out clearly.

As bull markets progress, long term holders spend (and likely sell) their coins. These spends result in old coins recategorizing into young coins, and with a higher Realized Price (i.e. the price the coin last moved). A higher economic weight carried by younger, more liquid coins results in the following findings in the Realized Cap HODL Wave chart:

• Distribution tops occur when young coins (<6 months) are valued at 80%+ of the value of the Realized Cap. This indicates newer buyers hold a large proportion of the economic value, creating increased probability of oversupply and a market top.

• Accumulation bottoms occur when young coins (<6 months) are valued at <40% of the value of the Realized Cap. This indicates buyers of coins during the bull cycle have either capitulated, or still hold onto the coins showing conviction. Smart money investors accumulate younger coins, and keep their older coin holdings dormant.

The chart below presents a view where all coins younger than 6 months are turned off making the proportion of old, unmoved coins stand out clearly.

As bear markets progress, younger unspent coins mature and recategorize into older coins, usually accumulated by smart money, higher conviction buyers. During this period the economic weight carried by older coins increases forming growing market support. This dynamic yields the following findings in the Realized Cap HODL Waves chart:

• Accumulation bottoms occur when old coins (>6 months) are valued at 60%+ of the value of the Realized Cap.

• Distribution tops occur when old coins (>6 months) are valued at <20% of the value of the Realized Cap.