Glassnode’s RHODL ratio is a key on-chain metric tracking the balance between long-term and short-term Bitcoin After reaching a ratio of 4.5, holders are flashing signals that the market bottom is more consistent than the cycle top.
The indicator is currently at its third highest level on record, indicating wealth is increasingly concentrated in older coins as younger, more speculative assets have been largely phased out during Bitcoin’s 50% price correction over the past six months.
The ratio compares the value of tokens held by long-term investors (typically holding for six months to three years) to the value of tokens held by short-term participants (defined as one day to three months). By measuring this balance, it can provide insight into whether the market is dominated by experienced holders or the fresh demands of new entrants.
Rising ratios typically reflect the aging of the coin and declining speculative activity, rather than an influx of new buyers. This dynamic typically follows sharp corrections in 2015, 2019 and 2022.
The RHODL ratio has been higher twice than now, in 2015 (ratio of 5) and 2022 (ratio of 7), both cycle lows, which may indicate further downside for Bitcoin.
However, a move to higher levels would typically require a further collapse in short-term holder activity and a near-complete drying up of demand, which is less evident today given the 25% recovery in prices from February lows, negative perpetual funding rates, and the broader macro risk environment that led to a record high in the S&P 500.
Update (April 17, 11:55 UTC): Change title “4.5 Signal: Why Glassnode’s RHODL ratio suggests Bitcoin has officially hit a bottom”
