Reserve Risk is used to assess the confidence of long-term holders relative to the price of an asset at any given point in time.
When confidence is high and price is low, there is an attractive risk/reward to invest (Reserve Risk is low). When confidence is low and price is high then risk/reward is unattractive at that time (Reserve Risk is high).
Reserve Risk is calculated by dividing price (in USD) by HODL Bank.
HODL Bank represents the opportunity cost of holding an asset. Each day a coin is held, the owner defers the ability to exchange it for its cash value. This deferred spending represents the confidence of HODLers - HODL Bank is the sum of these cumulative daily values.