Bitcoin RHODL Ratio Hits Third-Highest Level in History, Signaling Bitcoin Price Bottom Has Been Reached

BlockBeats News, April 17, according to CoinDesk, Glassnode's Bitcoin on-chain indicator RHODL Ratio is currently at 4.5, the third-highest level on record, with its signal more indicative of a market bottom rather than a cycle top.

The RHODL Ratio compares the value of Bitcoin held by long-term holders (holding from 6 months to 3 years) to that held by short-term holders (holding from 1 day to 3 months). An increasing ratio usually reflects a longer holding period for the chips and a reduction in speculative activity, rather than an influx of new buyers — a dynamic that has been seen after significant pullbacks in 2015, 2019, and 2022. During the 50% decline in Bitcoin over the past six months, speculative chips have been largely washed out, and wealth has been concentrated among long-term holders.

Historically, the RHODL Ratio has been higher than the current level only twice: in 2015 (ratio of 5) and in 2022 (ratio of 7), both corresponding to cycle bottoms, indicating that Bitcoin may still have further downside potential. However, to push the ratio to higher levels, it usually requires almost complete depletion of short-term holder activity, which is not yet evident under current conditions — Bitcoin has rebounded by about 25% from its February low, the perpetual contract funding rate remains negative, and the S&P 500 has also hit an all-time high.

Overall, this indicator shows that the current market conditions are more akin to a mid-cycle adjustment rather than a cycle top, with long-term holders reasserting dominance in the market, hinting at a potential nearing of a phase bottom.