A reversal in the trend of this on-chain ratio may be necessary for the #bitcoin bull run to begin in earnest.

The BTC ratio may provide clues as to when the next bull run in the #cryptocurrency may begin, as detailed by expert James V. Straten in an article on X.

Realized HODL ratio is an indicator that compares the value held by investors who have held for at least six months to three years to the value owned by investors who have held for one day to three months.

These ex-investors are a subset of the more general LTH demographic. This subset of LTHs may be called "single cycle LTHs" since their holding period is less than a full Bitcoin cycle (typically four years).

The "short-term holder" (STH) population's youngest members are the investors who have held for between one day and three months. Six months is the cutoff for the whole STH group, which is also where the LTH group begins.

The ratio of those holding onto their investments is useful since it shows how the market's money is being distributed between these two groups.

Here's a graph depicting the evolution of the Bitcoin RHODL ratio through time:

Rate of Holding Bitcoin Forever

The Bitcoin ratio has had a consistent behaviour across all Bitcoin cycles, as shown in the above graph. During the peak of a bull market, the measure inevitably falls to its lowest point before beginning an ascent.

Since the bear market causes the STHs to abandon the asset and sell, the LTHs are able to accumulate more at the reduced prices, representing a capital rotation towards the LTHs.

The LTHs will keep piling in until the market bottoms out. The ratio has always peaked at the same time as the price cycle bottomed, as seen by the graph.

STHs re-enter the market and increase their holdings as a result of the relief rally that follows the worst phase of a bear market, while some LTHs sell their coins to cash in on their winnings.

Straten has pointed out in the graph how the indicator has been falling precipitously over the past few months, mirroring its behaviour shortly before previous bull markets.

Yet, as shown by the circles, the indicator often exhibits a dead cat bounce while falling. Recent upward momentum in the indicator may indicate the recurrence of the dead cat bounce pattern.

When the Bitcoin RHODL ratio follows this pattern and begins to decline again, we may expect a genuine bull market to ensue. This time around, a similar reversal could be the one to keep an eye out for, since it might trigger the next bull run.

Bitcoin Value

Bitcoin's price has been relatively stable since yesterday's collapse, hovering around the $26,600 level.

BTC Price Graph