Indicator Overview

The indicator is the Long-Term Holder (LTH) to Short-Term Holder (STH) Supply Ratio. This metric calculates the ratio between the total circulating supply held by Long-Term Holders (coins held for more than 155 days) and the total supply held by Short-Term Holders (coins held for less than 155 days). This ratio directly compares the relative dominance of resilient supply versus the volatile, highly liquid supply in the market. A high ratio indicates strong hands are dominating the supply, while a low ratio suggests the supply is predominantly held by newer, less convicted investors.

How To Use

The LTH/STH Ratio is a powerful tool for identifying the macro-cycle rotation of supply and capital. High readings (when the ratio is near its historical peak) indicate that Long-Term Holders own a vastly larger portion of the supply than Short-Term Holders. This typically occurs at bear market bottoms, signaling maximum conviction and accumulation by strong hands, and minimal presence of speculators. Conversely, low readings (when the ratio is near its historical trough) indicate that the circulating supply has recently changed hands rapidly and is heavily dominated by Short-Term Holders. This transfer of supply from LTHs to STHs is characteristic of parabolic bull market peaks, suggesting the risk of widespread profit-taking by the newest cohort is maximal. The indicator therefore acts as a classic contrarian signal.