Long Holder Dynamics

The LHD model interprets changes in the Realized Capitalization for older coins to assess the the size of the market this cohort is proportionally to the size of coins younger than 1 year, in terms of Realized Price. When the size of the Realized Capitalization peaks for coins older than 1 year, it indicates that long-term holders have kept their coins for a long time and outsize the rest of the market. In this situation, these long term holders may start selling their coins to realize profits, which can lead to a price correction. This is reflected in the Price Indicator as a higher value, indicating a potential price peak and potential downward price movement as the market absorbs the increased coin supply.

Conversely, a decrease in the Realized Capitalization for coins older than 1 year implies that long-term holders have moved their coins recently, either to sell or trade, converting their held value into market supply. This increase in supply would likely push the price down as the market absorbs the new supply. This is reflected in the Price Indicator as a lower value, indicating a potential price bottom.