What Are Reserve Risk and HODL Bank?
Reserve Risk gauges the balance between price and the confidence of long-term holders. It is defined as the current Bitcoin price divided by HODL Bank.
HODL Bank is a running measure of the opportunity cost of holding that builds when holders sit tight and falls when older coins are spent in size. When coin-day destruction is low, HODL Bank tends to rise. When old coins move at higher prices, HODL Bank tends to decline.
This chart places price in context with long-term holder confidence and highlights historically favourable and risky zones.
How Reserve Risk Behaves
- Rising price pushes Reserve Risk higher.
- Rising HODL Bank pushes Reserve Risk lower by adding weight to the denominator.
- Sideways price while HODL Bank climbs can pull Reserve Risk down into favourable territory.
- Elevated price and falling HODL Bank can push Reserve Risk into riskier territory.
Why It Matters
- It frames risk versus reward through a holder-confidence lens rather than only price.
- It helps separate late-bear accumulation windows from late-cycle risk.
- It captures the effect of halvings and changing miner issuance indirectly through holder behaviour.
Interpreting Zones
Treat zones as guides. Use historical percentiles rather than fixed numbers.
- Depressed Reserve Risk often aligns with late-bear to early-bull phases where patient capital dominates.
- Mid-range Reserve Risk is compatible with constructive advances if other indicators agree.
- Elevated Reserve Risk has coincided with late-cycle conditions where distribution risk rises.
Practical Reads
- Duration matters more than single prints. Sustained time in favourable zones carries more information than a quick dip.
- Look for falling Reserve Risk during consolidations. That often reflects growing holder confidence beneath price.
- Be cautious when Reserve Risk rises quickly while other behaviour metrics show distribution.
Use With Confluence
Pair Reserve Risk with:
- Liveliness or CDD to confirm whether old coins are actually moving.
- SOPR and Realised Profit/Loss to see if profit taking is being absorbed or not.
- Realised Price bands to check if price has firm cost-basis support when Reserve Risk is low.
- Exchange netflows to validate whether supply pressure is increasing.
Common Pitfalls
- Treating any single zone as a trigger without support from behaviour and flow data.
- Ignoring that bands migrate as liquidity and market participation evolve.
- Reading Reserve Risk without checking whether HODL Bank is rising or falling.
A Simple Workflow You Can Reuse
- Open Reserve Risk (weekly) and note the zone and direction.
- Check Liveliness or CDD to see whether old coins are moving.
- Cross-check aSOPR and Realised PnL for behaviour.
- Compare price with Market, LTH, and STH Realised Price for valuation support.
- Decide: improving confidence with support, or elevated risk with signs of distribution.
FAQ
Is low Reserve Risk automatically bullish?
Not by itself. It improves the risk-reward backdrop, then you look for confluence in behaviour and valuation layers.
Why can Reserve Risk stay low for months?
If HODL Bank keeps rising while price is range-bound, confidence builds and the denominator stays heavy.
Does a spike mean a top?
Spikes need confirmation. Combine with SOPR, Realised PnL, and exchange flow before acting.
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