Reserve Risk Adjusted

How to read Reserve Risk Adjusted

Reserve Risk compares Bitcoin's price to the collective conviction of long-term holders. It captures the opportunity cost those holders accept every day they choose not to sell — the longer coins sit still while price rises, the more conviction is being expressed.

Standard Reserve Risk = Price ÷ HODL Bank (the accumulated opportunity cost of not selling)

The standard version structurally drifts lower over Bitcoin's lifetime, because the HODL Bank compounds every single day. That makes the raw number hard to compare across cycles — a "cheap" reading in 2013 looks nothing like a "cheap" reading in 2025 in absolute terms. To fix this, the chart below shows the Adjusted Reserve Risk (developed by the metric's original author, Hans Hauge): the standard value divided by its own trailing 300-day average.

Adjusted Reserve Risk = Standard Reserve Risk ÷ its 300-day moving average

This removes the long-term drift, so the result oscillates reliably around 1.0 in every cycle: values below 1 mean price is cheap relative to recent long-term-holder conviction; values above 1 mean it's stretched — regardless of what era of Bitcoin's price history you're looking at.

• Below 0.5 — Deep Value — Well below the 300-day trend. This combination has historically been rare and has appeared near major bear-market lows, when patient holders are proportionally most rewarded for their conviction.
• 0.5 – 1.0 — Fair Value — Below the long-term trend but not extreme. No urgent signal in either direction — long-term investors often continue steady DCA without urgency here.
• 1.0 – 1.5 — Elevated — Above the long-term trend. This has often appeared during stronger bull-market phases. Consider reviewing exposure rather than aggressively increasing it.
• Above 1.5 — High Risk — Well above the long-term trend. Cycle tops have often occurred in this zone. Long-term investors often become very cautious with large new allocations here.

Reserve Risk Adjusted is best used as a long-term cycle-risk gauge rather than a precise timing tool. It complements LTH-MVRV — both look at long-term holder behaviour, but Reserve Risk Adjusted focuses on conviction relative to price while LTH-MVRV focuses on realised profit.