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. This variant is specifically focused on the Bitcoin Short-Term Holder cohort.

• Nominal Volume is a measure of the raw BTC or USD value transferred. Here we consider entity-adjusted STH transfer volume.

• Realized Volume is a measure of the difference between the disposal and acquisition price of a coin (entity-adjusted).

Technical. The Realized Value RVT is calculated as the ratio between aggregate Realized Value and aggregate Nominal Value — comparing the economic payload (Realized) to the total value transferred (Nominal):

• STH Realized Value RVT = ema((STH Realized Profit + STH Realized Loss) / STH Transfer Volume, 14) x (STH Supply / 21e6) (orange)
• Reference levels: Full Market Detox at RVT = 0.003 (red) and Peak Realized Value at RVT = 0.02 (blue)
• The lower panel plots the Realized Profit Ratio = ema(Realized Profit / (Realized Profit + Realized Loss), 7) (black) with Profit (green, ≥ 0.5) and Loss (red, < 0.5) regime shading

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 oscillator and barcode chart at the bottom provide additional information to gauge the dominant market trend:

• 🟢 Where the STH Realized P/L Ratio > 0.5 it indicates that Realized Profits exceed Realized Losses, which is typical of more constructive market trends.

• 🔴 Where the STH Realized P/L Ratio < 0.5 it indicates that Realized Losses exceed Realized Profits, which is typical of bearish market trends.

Notes. Coined by Checkmate, inspired by work on the Sell-side Risk Ratio by Mikołaj Zakrzowski. Built from Entity-Adjusted STH Realized Profit, Entity-Adjusted STH Realized Loss, Entity-Adjusted STH Transfer Volume and STH Supply. The Long-Term Holder counterpart is Long-Term Holder Realized Value RVT.