In a tweet dated December 14, the co-founder of the trading group DecenTrader referred to the potential maximum risk returns for Bitcoin at current prices.

Swift: “The Euphoria Was Destroyed” From The Bitcoin Bear Market
BTC/USD is down about 70% from its all-time highs, and the pullback has been driving many investors away in the short term.

The FTX scandal has led to an even stronger capitulation, which is continuing as its after-effects panic nervous investors.

For Swift, the signs that speculator “euphoria” has now disappeared from Bitcoin come in the form of the famous HODL Waves metric.

The HODL Waves group transacted coins by age – how long they’ve been idle until they left their wallet. The resulting data shows how far the holders of long-term or short-term contracts deal.

There is an additional iteration of the scale, Realized Cap HODL (RHODL) Waves, as well as weighing these ranges at the realized price – the price at which each bitcoin last moved.

“So the RHODL waves tell us the basis for the cost of bitcoins that have been held in wallets for different periods of time. The waves appear on the chart every time period,” Swift explains in a description of the dedicated on-chain data resource, LookIntoBitcoin.

Currently, RHODL shows a distinct minority of coins moving around on the network shortly after they were used in a previous transaction. Conversely, transactions currently include coins that last moved 6-12 months ago as the most popular denomination.

On the accompanying chart, the darker the color of the wave, the more recently used coins have moved.

“The euphoria from bitcoin tourists has been completely destroyed,” Swift commented.

He added that under these conditions, the risk-reward ratio (R:R) for investment is more attractive, based on historical trends from RHODL Waves.

“Warmer Cap HODL Waves show periods when participants feel elated,” he wrote:

“We are now at the lows of the cycle… aka max r:r opportunity.”

Bitcoin Realized Cap HODL (RHODL) Waves Chart. Source: Philip Swift / Twitter
From surrender to accumulation
Swift is not alone in eyeing potential bullish signs from Bitcoin as 2022 draws to a close.

Related: Bitcoin Bear Market Will Last “2-3 Months Max” – Interview with BTC Analyst Philip Swift

In the latest edition of its weekly newsletter, “The Week On-Chain,” analytics firm Glassnode highlighted the ongoing trend from “capitulation” to “accumulation” by BTC investors.

It did this via the UTXO Realized Price Density metric, a similar tool to RHODL Waves, which provides insight into seller density based on the age of the coin.

“After every market move in 2022, we can see the intensity of coin re-allocation (and therefore re-accumulation) increase,” she wrote, noting that the drop from $24,000 saw $18,000 reaccumulate particularly strongly.

The accompanying chart showed those investors who bought the macro top of each BTC price, particularly in late 2017 and into April 2021.