It indicates the relationship of the price of bitcoin to the confidence that long-term BTC holders have at a given point in time.

Reserve Risk = Current Price of Bitcoin / Cumulative Opportunity Cost (HODL Bank)

When confidence is high and the price is low (green zone), there is an attractive risk/reward ratio to invest in bitcoin at that time.

When confidence is low and the price is high (red zone), the risk/reward ratio is not interesting.
Investing in Bitcoin during periods when reserve risk is in the green zone has produced outsized returns over time.

VOCDD: Value of Coin (Days) Destroyed
MVOCDD: Median Value of Coin (Days) Destroyed