Abstract: The age distribution of Bitcoin UTXO hides the behavior of various market participants. The performance of different entities at the bottom or near the top of the market is very different, which has important reference significance for market cycle judgment. It can be speculated that if it were not for the recent global black swan event, the Bitcoin price has been completed at the beginning of 2019, and it is currently at the bottom again.
Unlike bank accounts, Bitcoin uses the UTXO (Unspent Transaction Output) model. If you want to calculate the number of Bitcoins held at an address, you are essentially counting all UTXOs at that address. In other words, the UTXO set is the balance corresponding to the Bitcoin address, and the on-chain transactions are only changes to the UTXO set. Since all UTXOs have corresponding timestamps when they are traded on the chain, all Bitcoins have a corresponding untransaction duration (age).
In the following, Bitcoin UTXO is divided into three categories according to age: one is UTXO that is held for more than one year , such holders are usually defined as Hodler , corresponding to long-term holders; one is held in three UTXO below the month , this type of holder can be defined as a Trader , which indirectly reflects the behavior of short-term traders; there is also a category of UTXO between three months and one year , which is called here as Transitioner as it is most likely to transition to Hodler or Trader.
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I. Changes in Bitcoin Hodler holdings
Historically, Hodler's holdings have increased significantly, but there has been a trend of slowing year by year. It has increased significantly at the end of 2019, and is currently close to 11 million, maintaining the highest level in history for four consecutive months. By observing Hodler holdings and bitcoin prices, it can be found that Hodler holdings and bitcoin prices show a significant negative correlation in some periods. Especially near the historical cyclical peaks, after the bull market peaks in December 2013 and December 2017, Hodler's holdings reached periodical troughs in March 2014 and March 2018, respectively.
Hodler's holdings have also seen two significant highs in history, which were January 2013 and April 2016, respectively, a 12-month difference from the previous bear market lows (November 2011 and January 2015). 16 months. It can be considered that a considerable part of Hodler was sold for a year or more after the bear market bottomed and held for more than a year. Currently, Hodler's holdings remain at the historically high levels seen in March 2019, meaning that a cyclical bottom is forming.
In addition, among the Hodler holdings mentioned above, UTXOs that have been in existence for more than five years have only increased in the past, and currently account for 21%. And related research points out that a large part of it may have been lost, accounting for about 20% of the current total circulation of Bitcoin. Hodler's holdings have reached historical highs even after excluding the possible loss .
Changes in Bitcoin Trader holdings
The counterpart to Hodler is Trader. Of course, many Bitcoin Traders only trade on the trading platform, and do not need to transfer Bitcoin to their own wallet address, so the Trader holdings here do not represent all Trader behaviors, but only indirectly reflect them. Part of the subject's behavior. Judging from historical trends, except for very few periods, Trader's holdings have not increased significantly as Hodler in the past ten years.
Comparing Trader holdings with Bitcoin prices reveals that there is a positive correlation between the two, especially during a bull market. After the bull market peaks in June 2011, April 2013, December 2013, and December 2017, Trader's holdings were in July 2011, April 2013, January 2014, and October 2017 ( (Or January 2018). Moreover, there are obvious big fluctuations around the high point, which shows that many Traders have made a lot of changes around the apex and sold a lot during the decline of the Bitcoin price .
It is also worth noting that near the cyclical lows of the market in early 2015 and the end of 2018, Trader's holdings corresponded to a small peak, indicating that the market was active at this position due to a dip. Moreover, before and after the small peak, Trader's holdings were at historically low levels. At present, with the recent sharp decline in Bitcoin, Trader's holdings have rebounded significantly and are still at a historically low level.
Changes in Bitcoin Transitioner holdings
Transitioner is not old or short, stuck between Hodler and Trader, and its behavior may have both characteristics.
There have been four significant highs in the history of Transitioner holdings. The corresponding periods are from November 2011 to May 2012, May 2013 to October 2013, and June 2014 to October 2014. , And from May 2018 to August 2018. In these four periods, the period from the previous period when the high point of the price was around 6 months, indicating that many Transitioner had taken over the high and were forced to sell after holding for a period of time. Moreover, after completing a large number of sell-offs, Transitioner often corresponds to a periodical low point. For example, the two low points in March 2015 and February 2019 are near the periodical bottom.
In summary, combined with the UTXO age distribution, it can be speculated that if it had not recently encountered the global black swan event, the bitcoin price had been completed at the beginning of 2019 and is currently at the bottom again. Most of the UTXOs that have been withdrawn for more than five years have withdrawn from the circulation market. UTXOs with a period of more than one and five years have shown low absorption and high selling in the large cycle, and most of them are long-term beneficiaries. UTXOs below three months reflect typical speculator behavior, especially in bull markets, which are clearly active and currently at a historically low level. Most of the remaining UTXOs are unfortunate. They took orders near the peak of the bull market and ushered in a market low after the sell-off was completed.