This indicator measures how many “coin days” held by short-term holders (STH) are currently underwater — that is, held at a price below their acquisition cost. Coin days weight each UTXO by how long it has been held, so this metric captures both the volume of coins at a loss and their holding duration. It focuses specifically on coins held for less than approximately 155 days, isolating the behaviour of more recent market participants.

Tracking STH Coindays in Loss is important because it highlights stress among short-term holders. Spikes in this metric indicate a large portion of recently acquired coins are sitting at a loss, which often precedes capitulation events, increased selling pressure, or temporary market weakness. Conversely, low values suggest recent buyers are mostly in profit, signalling a healthier market environment.

Historically, sharp rises in this indicator have coincided with short-term corrections or periods of heightened volatility, while extended periods of low values tend to occur during sustained bull runs. By monitoring STH Coindays in Loss, traders and analysts can gain insight into the market’s short-term sentiment and potential turning points, complementing other on-chain and price-based metrics.