Indicator Overview

The indicator is the Realised Sell Side Risk Ratio. It is calculated by taking the sum of all profits and losses realised on-chain (the total dollar value of coins spent regardless of whether the spend resulted in a gain or loss) and dividing this sum by the Realised Capitalization of the asset. The Realised Capitalization represents the aggregate cost basis of the entire market. This ratio quantifies the aggregate selling pressure flowing through the market relative to the total capital invested, providing a normalized measure of market equilibrium and risk.

How To Use

The Realised Sell Side Risk Ratio is an effective tool for evaluating the market's supply-side risk and identifying phases of high volatility or consolidation. High values indicate that investors are realizing a significant amount of profit or loss relative to the market's cost basis. This high level of value realization is typical of late-stage bull markets (heavy profit-taking) or major capitulation events (heavy loss-selling), signalling a relatively high-risk environment and suggesting the market needs to re-find equilibrium. Conversely, low values indicate that coins being spent are moving relatively close to their break-even cost basis. This low realization and low volatility condition is typical of prolonged market consolidation, accumulation phases, or protracted bear markets, suggesting an exhaustion of significant profit or loss events and aligning with potential macro market lows.