The Sell-Side Risk Ratio compares the value of profits and losses realised on-chain with the size of Bitcoin’s realised capital base. It asks whether recent value realisation is large or small for a market of this size.

That scaling matters. The same dollar amount can be exceptional in one era and routine in another, so the raw profit-and-loss figure needs a denominator before it can be compared across time.

How the Sell-Side Risk Ratio is calculated

Formula. (Realised Profit + Realised Loss) ÷ Realised Capitalisation. Some chart implementations smooth the result, commonly with a 15-day moving average.

The numerator uses the absolute value realised by spent outputs relative to their last-moved prices. The denominator is Realised Cap, not a direct measure of every coin available to sell.

What low and high readings mean

A low reading means little profit or loss is being locked in relative to Realised Cap. It often appears when spent coins are moving close to their on-chain cost-basis proxy and the market is closer to equilibrium.

A high reading means substantial profit or loss is being realised relative to the capital base. That can occur during heavy profit-taking in advances or capitulation in declines, so the level alone is not directional.

What it does not tell you

The metric does not distinguish demand from supply, and it does not prove that every on-chain movement was an economic sale. Entity-adjusted data can reduce obvious internal transfers, but no heuristic is perfect.

Low readings have often accompanied quieter volatility regimes and high readings volatile ones. “Often” matters: the relationship is historical, not mechanical.

How to read it

Very high. Large profit or loss realisation relative to Realised Cap; check price direction and the cohort responsible.

Elevated. Meaningful value is being locked in and the market may be searching for a new equilibrium.

Moderate. Ordinary realisation for the current capital base.

Low. Spent coins are realising comparatively little profit or loss.

The Sell-Side Risk Ratio updates daily inside the Profit & Loss dashboard, alongside Realised Profit, Realised Loss and cohort views.

Common questions

Why divide by Realised Cap?

It normalises daily profit and loss by a capital-base proxy, making different market eras more comparable than raw dollars alone.

Does a low reading predict the next direction?

No. It describes low value realisation and relative equilibrium. Historically, quiet conditions have resolved in both directions.

Is a high reading bearish?

Not necessarily. It can reflect profit-taking in a strong advance or loss-taking in a decline. Price, cohort and trend provide the direction.

How is this different from Realised Profit?

Realised Profit is an absolute dollar amount. Sell-Side Risk adds Realised Loss and scales the total by Realised Cap.

What should I read beside it?

Price, Realised Profit and Loss, SOPR and cohort splits. Together they show the size, direction and source of the value being realised.