Profit realization rate measures the speed or frequency at which investors sell their digital assets for a gain. This metric quantifies the proportion of spent coins that are moved at a price higher than their acquisition cost, indicating how actively market participants are securing profits. A high profit realization rate often occurs during bull markets or after significant price rallies, as holders capitalize on their unrealized gains. Conversely, a low rate suggests either accumulation or a lack of profitable selling opportunities.
Context
The profit realization rate is a key on-chain indicator used by analysts to assess market sentiment and potential selling pressure. Discussions often center on whether a rising rate signals a healthy market correction or a potential top. A critical aspect to watch is the behavior of different holder cohorts, such as short-term versus long-term investors, as their profit realization patterns can differ significantly.
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