Glassnode’s RHODL Ratio May Suggest Bitcoin Market Is Near Capitulation

Glassnode data shows that the current trend of the RHODL ratio indicates that the Bitcoin market may be close to giving up.

Data Shows Bitcoin’s RHODL Ratio Has Declined

According to the latest weekly report from glass supply of coins that are more than a year old has increased significantly recently.

To understand the RHODL ratio, you first need to look at “Realized HODL Waves.” This indicator measures the amount of bitcoin that is dominated by the dollar and that investors have held for different periods of time.

For example, the waveband of coinage 1+ Year shows the total amount of coins that all investors have been trading for at least a year and currently own.

The ratio of “HODL achieved” (or RHODL for short) is a measure that tells us the ratio between wavebands of one-week-old bitcoin supply and one-year supply.

When the value of this index reaches a high level, it means that the new stockholders own the majority of the supply at the moment. These values ​​usually occur during price peaks.

On the other hand, lower values ​​of the scale indicate that 1+-year-old domains currently hold a larger portion of the total Bitcoin supply. Historically, these index values ​​have been observed near market bottoms.

Now, here is a chart showing the trend in the BTC RHODL ratio over the history of the cryptocurrency:

Realized HODL Ratio for Bitcoin

Looks like the value of the indicator has seen decline recently | Source: Glassnode's The Week Onchain - Week 13, 2022

As you can see in the chart above, the Bitcoin RHODL ratio has noticed some sharp downside in recent months.

This trend means that the supply of one-year-old coin holders is rising, while the supply of one-week-old coins is declining.

Also, as the chart shows, such a trend with the Bitcoin RHODL ratio trending down after an uptrend has historically indicated that the market is about to capitulate.

Back in 2012, it was rather a sign of an early bull market Instead of an approach to the last stages of a bear market.

Therefore, the current trend can go in both directions, but the near capitulation phase is when these indicator values ​​were observed the last two times.

BTC price

At the time of writing this report, Bitcoin price It is floating around $47.8K, up 11% in the past seven days. Over the past month, the cryptocurrency has gained 27% in value.

The chart below shows the current price trend over the past five days.

Bitcoin price chart

BTC's price seems to have surged up over the last couple of days | Source: BTCUSD on TradingView

Leave a Comment

Your email address will not be published.