Definition. In on-chain analysis, we can separate the notion of nominal value and realized value when assessing transfer volumes. During periods of high volatility such as late-stage bull/bear markets, it is common to observe periods of elevated realized value, as investors take profits at tops, or capitulate at lows. The Realized Value RVT is an oscillator designed to capture the relative magnitude between Realized Value and Nominal Value transferred — in other words, it compares the economic payload (realized) to the total value transferred (nominal). The oscillator is shown in orange over price (grey), with a profit/loss regime barcode at the bottom.

Technical. Two notions of volume are compared:

• Nominal Volume is a measure of the raw BTC or USD value transferred. Here we consider change-adjusted volume.
• Realized Volume is a measure of the difference between the disposal and acquisition price of a coin (also change-adjusted).

The oscillator and regime strip are computed as:

• Realized Value RVT = ema((Realized Profit + Realized Loss) / Transfer Volume (Change-Adjusted), 14)
• Realized Profit Ratio = sma(Realized Profit / (Realized Profit + Realized Loss), 30) (black), with 🟢 green columns where the ratio >= 0.5 (profit regime) and 🔴 red columns where it is < 0.5 (loss regime)
• Reference levels: Full Market Detox at RVT = 0.0075 (red line) and Peak Realized Value at RVT = 0.075 (blue line)

Interpretation.

• Higher values indicate periods where net change in realized value is large relative to the aggregate nominal transfer volume. During bullish periods this indicates a large degree of profit taking is occurring, and increases the probability of oversupply. In a bear market, it can signify a capitulation event has taken place, whereby large realized losses were locked in relative to the total transfer volume.

• Lower values indicate periods where the net change in realized value is small relative to the aggregate nominal transfer volume. This typically occurs when the majority of coins on the move are being transacted at a very similar pricestamp to their original acquisition price (break-even), and thus realizing little net change in value. This is typical of late-stage bear markets and early bull markets, where HODLing behaviour is at its peak, and most on-chain volume is sourced from the set of already highly active supply.

The barcode strip distinguishes whether realized value is dominated by profits (constructive market trends) or losses (bearish market trends), following the framework of the Realized P/L Ratio.

Notes. Coined by Checkmate, inspired by work on the Sell-side Risk Ratio by Mikołaj Zakrzowski. Built from Realized Profit, Realized Loss and Change-Adjusted Transfer Volume. See also the RVT Ratio.