BITCOIN REALIZED HODL (RHODL) RATIO
The RHODL Ratio chart is a powerful on-chain indicator used to assess Bitcoin market sentiment by comparing the value held by new participants versus long-term holders. By analyzing the ratio of recently moved coins to coins held for 1-2 years, traders can identify periods of market overheating and froth. A high RHODL Ratio has historically been a reliable signal for identifying bull market tops, making it a key tool for cycle analysis.
BTC Price
RHODL Ratio
Bitcoin RHODL Ratio Explained: What Is It and How to Read the Chart?
Indicator Overview
This indicator uses a ratio of Realized Value HODL Waves. In summary, Realized Value HODL waves are different age bands of UTXOs (coins) weighted by the Realized Value of coins within each band. The Realized Value is the price of UTXOs when they were last moved from one wallet to another. The RHODL Ratio looks at the ratio between the RHODL band of 1 week versus the RHODL band of 1-2 years. It also calibrates for increased HODLing over time and for lost coins by multiplying the ratio by the age of the market in number of days. When the 1-week value is significantly higher than the 1-2yr value, it is a signal that the market is becoming overheated.
How To View The Chart
When the RHODL ratio starts to approach the red band, it can signal that the market is overheating. This has historically been a good time for investors to take profits in each cycle.Unlike some other on-chain indicators, the RHODL ratio does not give a false signal of a cycle high in April 2013. This gives it a unique advantage over indicators that may have been less reliable in earlier market cycles.