RHODL Ratio

Formula
Indicator Overview

This indicator uses a ratio of Realized Value HODL Waves.  For an explanation of Realized Value HODL Waves see the RHODL Waves chart.

In summary, Realized Value HODL waves are different age bands of UTXO’s (coins) weighted by the Realized Value of coins within each band.

The Realized Value is the price of UTXO’s (coins) when they were last moved from one wallet to another.

RHODL Ratio looks at the ratio between RHODL band of 1 week versus the RHODL band of 1-2yrs.

It also calibrates for increased hodl’ing 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 it is a signal that the market is becoming overheated.

How to Use this Indicator

The indicator is able to identify with great accuracy the price high of each of Bitcoin’s previous macro cycles.

It identifies the market top to within a few days accuracy.

RHODL ratio entering into the red band signals that the market is approaching the top of its cycle.  This has historically been a good time for investors to take profits in each cycle.

Unlike other on-chain indicators, RHODL ratio does not give a false signal of a cycle high in April 2013.  This gives it a unique advantage over other on-chain indicators.

Created by

Philip Swift (@positivecrypto)

Date created

June 2020

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Realized HODL Ratio Article