Definition ∞ The Realized Profit Metric quantifies the total profit realized by all market participants who have sold their digital assets for a price higher than their acquisition cost. This on-chain indicator aggregates the gains locked in by sellers over a specific period. It provides insight into the overall profitability of the market and the extent of profit taking activity. A high realized profit value suggests significant selling by profitable holders.
Context ∞ Analysts use the Realized Profit Metric as a key component of on-chain analysis to gauge market sentiment and potential selling pressure. Spikes in realized profit often coincide with local market tops, indicating a profit taking phase. A critical discussion involves comparing realized profit with unrealized profit to assess the remaining selling potential in the market. Future research aims to correlate this metric with broader macroeconomic indicators for a more comprehensive market view.
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