Bitcoin's RHODL Ratio Slump Raises Bull Run Concerns

Bitcoin's Realized HODL (RHODL) Ratio indicator has been showing a downward trend, raising concerns among analysts about the cryptocurrency's momentum. In a recent post, on-chain analyst Checkmate discussed the latest trend in the RHODL Ratio of Bitcoin, which calculates the ratio between any two given RHODL wave bands.

The RHODL wave bands track the percentage of the total BTC supply that was last moved within a specific age range, with an additional weighting factor: the Realized Value. This metric represents the spot price at which a given token was last transacted on the blockchain, indicating the coin's current cost basis. When the value of the indicator increases for a particular band, it suggests that the amount of capital invested in coins within that age range is rising.

The RHODL Ratio of the 1 week and 1 to 2 years bands has been of particular interest. The chart shared by the analyst shows that the Bitcoin RHODL Ratio for these wave bands reached a high level during the rally beyond $100,000 last year. This trend implies that the 1 week wave band, representing fresh capital entering the sector, grew large relative to the veteran 1 year to 2 years band.

Historically, an extreme rotation of capital into the 1 week wave band has coincided with bull run tops for Bitcoin's price. Since last year's peak, the metric has been declining, suggesting that new demand for the asset is slowing down. The momentum oscillator for the indicator has also dipped into a zone that has previously served as a transition region between bullish and bearish trends.

Given the historical pattern, this development in the RHODL Ratio is not ideal for Bitcoin. It remains to be seen whether the metric will continue its decline in the coming days, potentially signaling a transition away from a bull market, or if it will bounce back up.

Bitcoin made a retest of the $98,000 mark earlier today but found rejection, and its price is now down to $97,000. The trend in the BTC price over the last day indicates a slight downturn, which may be related to the concerns raised by the RHODL Ratio indicator.