Realized Profit Metrics

Definition ∞ Realized profit metrics measure the aggregate gains or losses taken by investors when they sell digital assets. These on-chain indicators track the difference between the price at which coins were acquired and the price at which they were subsequently moved or sold. High realized profits suggest that a significant portion of the market is selling at a gain, potentially indicating a local top or a period of profit-taking. Conversely, low realized profits or realized losses can signal capitulation or market bottoms.
Context ∞ Crypto news frequently uses realized profit metrics to assess market sentiment and identify potential turning points in price cycles. Analysts monitor these metrics to understand investor behavior and gauge the overall health of the market. The current discourse often debates the predictive power of these indicators, particularly in distinguishing between healthy profit-taking and a sustained market reversal.