Bitcoin Realized HODL Ratio

Philip Swift (@PositiveCrypto)
6 min readDec 15, 2020

A New On-Chain Indicator For Accurate Identification of Bitcoin Global Cycle Highs.

By Philip Swift.

This new indicator builds on previous ideas developed in the blockchain analysis space. If you're not familiar with them, I highly recommend taking the time to review them as they are excellent and, in my opinion, were pivotal pieces in moving forward the thinking around blockchain analysis:

  1. Market Value to Realized Value Ratio by David Puell and Murad Mahmudov.
  2. HODL Waves by Unchained Capital.

To keep this article brief, I will assume that the reader is broadly familiar with those tools. Three important terms from those articles to remember:

  1. Market Value: Also known as market capitalization, to calculate it you would multiply current BTCUSD trading price by the number of bitcoins mined thus far. Very much like Market Cap in traditional markets where one multiplies the share price by number of shares for a given company.
  2. Realized Value: Instead of counting all of the mined coins at equal current price, the UTXOs are aggregated and assigned a price based on the BTCUSD market price at the time when said UTXOs last moved from one wallet to another wallet. It can be thought of as the cost basis for coins currently held.
  3. HODL Waves: Groups UTXO’s by age since they were last moved. When these different groups by age are charted, they look like waves. Hence the term HODL waves.

Recently @typerbole created a version of HODL waves where the UTXO’s in each age band were weighted by their Realized Value price. The result looks like this:

Introducing Realized HODL (RHODL) Ratio

This new indicator aims to identify extremes in market psychology over time to accurately identify Bitcoin global cycle highs and lows.

It achieves this by analysing Realized Value HODL waves that are made up of coins that have last moved recently on a short time frame (the past week) versus Realized Value HODL waves made up of coins that last moved much further in the past and on a longer time frame (1–2 years ago).

It then also calibrates for the principle that due to Lindy Effect it becomes easier for HODL’ers to HODL over time, and also to account for lost coins. It does this by multiplying the Realized HODL Ratio result by number of days since the data set started. I start my data set in August 2010 around the time an exchange-listed price for Bitcoin began to operate.

Therefore the formula for Realized HODL Ratio is:

The resulting indicator highlights when shorter-term Realized HODL waves are worth considerably more or less versus longer-term Realized HODL waves. Which in turn highlights the major cycle tops of Bitcoin’s price cycles with great accuracy and consistency…within 1 week of the market topping for each cycle:

Global cycle tops for $BTC price are identified by RHODL Ratio (blue line) breaching the overbought zone (pink band).


Realized HODL Ratio is arguably effective because it captures the speculative boom/bust market psychology of Bitcoin as it moves through its adoption phase market cycles. These cycles are in part driven by the halving schedule and the continued adoption of Bitcoin over time. This can be visualized when overlaying the Bitcoin halving events with Realized Value, where we see on macro timescales to date, how Realized Value sets a base level over a 1–2yr period prior to the halving before then accelerating as market fervour commences.

Realized value and Bitcoin halvings

The RHODL Ratio is noteworthy because it provides some different and interesting results versus other on-chain indicators:

  1. No ‘false’ signal in 2013:

A notable issue with on-chain indicators to date that attempt to pick global cycle tops and bottoms is that they provide what could be argued as a false sell signal in 2013.

In April 2013, $BTC price reached $230 before retracing and then accelerating back up to the actual macrocycle top of $1,130 seven months later, in November 2013. Theoretically, an investor relying on these tools would have sold the $230 area and waited for a buy signal (indicator entering the equivalent of the green zone on the chart below) before re-entering. In this instance, there was no buy signal across those indicators and the investor would have missed the subsequent run-up to $1,130.

While an investor should never rely on such tools in isolation, it is not particularly satisfactory that on-chain tools highlight April 2013 as a global cycle top. As can be seen below, this issue does not occur with Realized HODL Ratio:

2. Accurate at calling tops:

While the pink band can be used to scale out of $BTC investments, Realized HODL Ratio correctly identifies market cycle tops to within 1 week of the market topping out.

RHODL Ratio called the 2017 top 3 days before the market topped. In 2014 it called the market top to the exact day.

3. Minimal indicator downward drift over time:

MVRV and some other on-chain indicators appear to be drifting downwards over time which will add difficulty to timing future cycle tops. As David Puell explains:

Going forward, as market cap decreases in volatility, we believe that the upper threshold of MVRV might not prove as reliable — as market cap overextends less and less above realized cap as time progresses.

MVRV downward drift over time of upper threshold

While not totally exempt from this issue, Realized HODL Ratio appears to have far less downward drift over time allowing for greater confidence in identifying forthcoming market cycle tops.

Some caveats

  1. Market Cycles: Realized HODL Ratio uses it’s 1–2yr HODL period as a base time period to compare short term activity against. Therefore it relies on Bitcoin continuing to grow in a broadly consistent manner over time. While this is likely for the next 3-5 years due to halving effects and adoption rates, nothing is guaranteed.
  2. Market Structure: It is likely that market cap volatility will decrease over time, which will impact Realized HODL Ratio’s ability to signal tops. As with other indicators, it may struggle to signal a market top should we see prolonged drops in volatility and rounded tops in Bitcoin’s price structure in the future.

Where are we now and live data chart

Currently, RHODL Ratio is indicating that we are in the early stages of a bull market having moved out of the green accumulation band. Current RHODL ratio levels are comparable with early bull market stages of 2013 and 2016.

This suggests that there remains plenty of upside this coming bull run before we enter the overbought red zone.

You can click here (night mode) or here (day mode) to access a live interactive data chart of RHODL Ratio.

Philip Swift.

Thanks and reference

Thank you to Glassnode for supplying the underlying data sets for this analysis and the RHODL live charts.

Thank you also to Rafael Schultze-Kraft, David Puell, Filbfilb and Willy Woo for reviewing and providing feedback on initial drafts.



Philip Swift (@PositiveCrypto)

Crypto Trader and Investor. Market Cycles + Blockchain Analysis + Market Psychology. Follow me on Twitter for my analysis @positivecrypto