Indicator Overview

The indicator calculates the percentage extension of a metric from the Short-Term Holder Realised Price (STH RP). Positive values reveal the degree to which the market has extended past the average acquisition cost of short-term holders. Higher positive values signify a greater likelihood of overheating, visualised with a gradient from green (low extension) to deep red (high extension).

How To Use

Consider the STH Extension when it enters a parabolic zone as a potential signal for a major market top or a significant local pullback, indicating extreme overextension beyond the STH RP. Conversely, when the extension is in the low range, it suggests the market is trading close to the average cost basis for recent buyers, which historically identifies areas of strong support or accumulation opportunities.