Indicator Overview

The indicator measures the total unrealised loss currently held by Long-Term Holders (LTHs) (coins held for more than 155 days) normalised against the Bitcoin market cap.

This metric is calculated by taking the LTH Unrealised Loss (in dollars) and dividing it by the market capitalization. This ratio effectively compares the amount of latent financial stress held by the resilient cohort to the total market size, providing a macro, cycle-adjusted view.

How To Use

LTH Relative Unrealised Loss is a crucial tool for identifying macro-cycle bottoms and extreme undervaluation. High readings (in the historical bottom zone) indicate that LTH losses account for a historically large fraction of the market cap. This signals extreme financial pain for the most resilient investors, often preceding major market bottoms as it represents the peak of capitulation by strong hands. Conversely, low readings (near zero) indicate minimal LTH losses. This suggests the market is highly profitable, which is typical during a strong uptrend and aligns with periods of market euphoria where LTHs are incentivised to distribute their profitable supply.