An on-chain analyst has pointed out that the Realized HODL (RHODL) Ratio indicator is on the way down, a sign that may not be positive for Bitcoin.
Bitcoin RHODL Has Been Losing Momentum Recently
In a new post on X, analyst Checkmate has discussed about the latest trend in the RHODL Ratio of Bitcoin. The “Realized HODL (RHODL) Ratio” is an on-chain metric that calculates the ratio between any two given RHODL wave bands.
HODL wave bands keep track of the percentage of the total BTC supply that was last moved inside a given age range. The RHODL wave bands are a modified form of these, adding an additional weighting factor: the Realized Value.
Put simply, the Realized Value is the spot price at which a given token of the cryptocurrency was last transacted on the blockchain. That is, it’s the coin’s current cost basis.
As the RHODL wave band multiplies this metric with the amount of supply present within a given band, it tells us about the sum of cost bases of coins in that band. When the value of the indicator goes up for any particular band, it means the amount of capital invested into coins falling in the age range is rising.
In the context of the current topic, the RHODL Ratio of the 1 week and 1 to 2 years bands is of relevance. Below is the chart shared by the analyst, that shows the trend in this RHODL Ratio over the history of Bitcoin.
As displayed in the above graph, the Bitcoin RHODL Ratio for these wave bands shot up to a high level during the rally beyond $100,000 that took place last year. Such a trend implies the 1 week wave band, which corresponds to the fresh capital coming into the sector, grew large relative to the veteran 1 year to 2 years band.
From the chart, it’s apparent that an extreme rotation of capital into the 1 week wave band has historically coincided with bull run tops for the cryptocurrency’s price.
Since last year’s peak, the metric has been on the way down, which suggests the new demand for the asset is now slowing down. This is also visible in the momentum oscillator for the indicator attached by the analyst on the bottom, which just dipped into a zone that has played the role of the transition region between bullish and bearish trends in the past.
Considering the historical pattern, this development in the RHODL Ratio is certainly not the best for Bitcoin. It now remains to be seen whether the metric would continue its decline in the coming days, potentially signaling a transition away from a bull market, or if it will bounce back up.
BTC Price
Bitcoin made a retest of the $98,000 mark earlier today, but it appears the coin ended up finding rejection as its price is now down to $97,000.
Featured image from Dall-E, checkonchain.com, chart from TradingView.com
Keshav Verma
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
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