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

Keshav Verma

3 years ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Glassnode data shows the RHODL Ratio’s current trend suggests that the Bitcoin market could be near capitulation.

Data Shows Bitcoin RHODL Ratio Has Observed Decline Recently

As per the latest weekly report from Glassnode, the supply of coins older than one year has significantly risen recently.

To understand the RHODL ratio, you first need to have a look at the “realized cap HODL waves.” This indicator measures the USD-dominated amount of Bitcoin held by investors hodling since different periods of time.

For example, the wave band for coin age more than 1+ year shows the total amount of coins all investors hodling since at least a year currently own.

The “realized HODL” (or RHODL in short) ratio is a metric that tells us the ratio between the wave bands of 1-week old and 1-year old Bitcoin supplies.

When the value of this indicator reaches a high, it means new holders hold a majority of the supply at the moment. Such values usually occur during price tops.

On the other hand, low values of the metric suggest 1+ year old age bands currently own a larger part of the total Bitcoin supply. These values of the indicator have historically been observed near market bottoms.

Now, here is a chart that shows the trend in the BTC RHODL Ratio over the history of the crypto:

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 above graph, the Bitcoin RHODL Ratio has observed some sharp downtrend in recent months.

This trend means that the supply of 1+ year old holders is going up, while that of one-week old coins is declining.

Also, as the chart shows, such a trend with the Bitcoin RHODL ratio heading down after a bull run has historically signaled that the market is near capitulation.

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

So, the current trend can go both ways, but the near capitulation phase is when these values of the indicator were observed the last two times.

BTC Price

At the time of writing, Bitcoin’s price floats around $47.8k, up 11% in the last seven days. Over the past month, the crypto has gained 27% in value.

The below chart shows the trend in the price of the coin over the last five days.

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

Featured image from Unsplash.com, charts from TradingView.com, Glassnode.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.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.