Definition. This chart shows the rolling yearly sum of Realized Profits and Losses normalized by the Realized Cap, allowing comparison between market cycles. It presents three traces: 🟩 Rolling Relative Yearly Sum of Realized Profits, 🟥 Rolling Relative Yearly Sum of Realized Losses (displayed as negative), and 🟣 the Yearly Profit/Loss Ratio. Realized Profits occur where a coin is spent at a price higher than the original acquisition price (and vice-versa for Realized Losses).

Technical. The traces are constructed as:

• Relative Yearly Profit = sum(Realized Profit, 365) / Realized Cap 🟩
• Relative Yearly Loss = -1 x sum(Realized Loss, 365) / Realized Cap 🟥
• Yearly Profit/Loss Ratio = Yearly Profit / Yearly Loss 🟣

Normalizing by Realized Cap expresses both flows relative to the aggregate cost basis of the supply, which keeps magnitudes comparable across cycles and assets.

Interpretation. The oscillator trace enables visualization of market cycles:

• Higher values, uptrends, and peaks indicate that over the last year, a greater volume of profits were realized than losses (typical of bull markets).

• Lower values, downtrends, and troughs indicate that over the last year, a greater volume of losses were realized than profits (typical of bear markets).

Sustained trend reversals in the ratio have historically accompanied macro regime transitions, as dominance rotates between profit-taking and loss capitulation.

Notes. Built from Realized Profit, Realized Loss and Realized Cap. The USD-denominated counterpart is Yearly Realized Profit/Loss.