Supply bands reveal holder conviction
HODL waves partition the circulating supply into age cohorts: coins last moved under 1 day ago, 1 week, 1 month, 6 months, 1 year, and 5 years. Each band's height shows the percentage of total supply held in that age bucket. By observing how supply migrates between bands over time, analysts infer whether long-term holders are accumulating (moving supply into older bands), distributing (selling from older bands), or new holders are taking positions (accumulation in younger bands).
Interpreting waves across market cycles
During accumulation phases, supply shifts into older bands as holders refuse to sell despite price dips. At market peaks, long-held supply can suddenly activate and move, signaling distribution. The 1-year and 5-year bands are particularly revealing because coins held that long represent conviction. When old supply activates during a bull run, it often precedes corrections because it indicates profit-taking by early believers.