news3h ago

Bitcoin Rhodl Ratio Hits 4.5, Flashing 3rd-Highest Bottom Signal Ever... Is The Bottom In?

Glassnode's Bitcoin RHODL ratio has reached 4.5, its third-highest reading ever, historically associated with cycle bottoms. Combined with negative funding rates and institutional undervaluation signals, on-chain data suggests $BTC may be forming a floor.

A Rare On-Chain Signal

@glassnode's RHODL ratio, a key on-chain metric tracking the balance between long-term and short-term $BTC holders, is flashing signals more consistent with a market bottom than a cycle top after hitting a reading of 4.5. Currently at its third-highest level on record, the indicator shows that wealth is increasingly concentrated in older coins, as younger, more speculative holdings have been largely flushed out during a 50% correction in Bitcoin over the past six months.

The ratio compares the value of coins held by longer-term investors — typically those holding for six months to three years — against coins held by short-term participants, defined as one day to three months. By measuring this balance, it offers insight into whether the market is dominated by seasoned holders or fresh demand from new entrants. A rising ratio often reflects coins aging and a decline in speculative activity, rather than an influx of new buyers.

Historical Context and What Comes Next

The only two moments when the ratio exceeded the current level were 2015, with a reading of 5, and 2022, with a reading of 7 — both coinciding with historical cycle lows. In both prior instances, a sustained bull market followed.

This opens the possibility that there may be additional room for further price decline. However, reaching even higher levels would require an even deeper collapse in short-term activity and a near-total exhaustion of demand — conditions that today appear less likely. Bitcoin's recovery — which rose 25% from February lows — perpetual funding rates in negative territory, and a favourable macroeconomic environment point to a stabilisation scenario rather than further deterioration. Glassnode interprets these signals as more consistent with a market bottom than with a cycle top, which could mark the beginning of a new bullish phase for Bitcoin.

The on-chain setup is further supported by institutional sentiment. According to data flagged by @BSCNews, 75% of institutions surveyed consider $BTC undervalued at current levels — a combination that, taken together with negative funding rates and the RHODL reading, presents a picture more characteristic of a floor than a ceiling.

It is worth noting that the RHODL ratio alone does not confirm a market direction — it must be considered alongside other indicators such as trading volume, ETF inflows, miner activity, and macroeconomic signals.

Sources:
CoinDesk: Glassnode's RHODL Ratio and the Bitcoin Bottom Signal
Crypto Economy: Bitcoin RHODL Ratio Flashes 4.5 Signal
Glassnode Insights: Bitcoin On-Chain Market Cycles

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Author

Jon Wang

Jon studied Philosophy at the University of Cambridge and has been researching cryptocurrency full-time since 2019. He started his career managing channels and creating content for Coin Bureau, before transitioning to investment research for venture capital funds, specializing in early-stage crypto investments. Jon has served on the committee for the Blockchain Society at the University of Cambridge and has studied nearly all areas of the blockchain industry, from early stage investments and altcoins, through to the macroeconomic factors influencing the sector.