Glassnode data shows the RHODL Ratio’s current trend suggests that the Bitcoin market could be near capitulation.
Recent Data shows that the Bitcoin RHODL Ratio has been in decline
The latest Weekly Report from Glassnode shows that the quantity of coins older than one-year has increased significantly in recent weeks.
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.
The wave band for coins older than one year, which is an indicator of the amount that investors have hoarded since the beginning of the year, shows how many.
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.
If this indicator’s value reaches an extreme level, then new holders are likely to hold the majority of current supply. This happens most often during peak prices.
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However, low values for the indicator indicate that older age groups (1+ years) currently have a higher proportion of Bitcoin supply. This indicator has been found to be at or near its lowest value in history.
Here’s a chart showing the evolution of the BTC-RHODL Ratio throughout the history crypto.
The indicator seems to have lost its value recently. Source: Glassnode's The Week Onchain Week 13, 2022| Source: Glassnode's The Week Onchain - Week 13, 2022
The graph above shows that the Bitcoin RHODL Ratio experienced a sharp decline in recent months.
This indicates that there is a rising supply of 1-year old coins, but a decreasing supply of one-week-old coins.
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As the chart illustrates, a downward trend in Bitcoin’s RHODL ratio after a bull market has traditionally indicated that the market may be nearing capitulation.
However, this was more a sign that 2012 was the beginning of the bull market than a transition to the latter stages.
This means that the trend may be both positive and negative. However, when the indicators were last viewed, it is called the “near capitulation” phase.
BTC price
At the time of writing, Bitcoin’s price floats around $47.8k, up 11% in the last seven days. The crypto’s value has risen 27% over the last month.
The chart below shows how the currency’s price has changed over the course of five days.
BTC seems to be on the rise in price over the past few days. Source: BTCUSD at TradingView| Source: BTCUSD on TradingView
Unsplash.com featured image, Charts from TradingView.com and Glassnode.com charts