RHODL Ratio is calculated by comparing the realized value (realized cap) of young coins with old coins. Specifically, the ratio is calculated as:

RHODL Ratio = Realized value of 1-week coin supply / Realized value of 1-2 year coin supply

The RHODL ratio measures the relative distribution of wealth between short-term holders (coins recently transferred) and long-term holders (coins held for one or two years).
A high RHODL ratio indicates that a large proportion of the Bitcoin supply is held by short-term holders, meaning that a large portion of wealth is invested in recently transferred coins.

The 1m RHODL is a smoothed, or 1-month moving average, version of the RHODL Ratio, which helps eliminate noise and shows clearer trends.

The ratio of recent speculative activity (1 week) to long-term accumulation (1-2 years), smoothed over 30 days.

When the RHODL ratio starts to approach the red band, it can indicate that the market is overheating, although over time the peaks have been decreasing in height.

Historically, this has been a good time for investors to take profits in each cycle.

Created by Philip Swift @positivecrypto