Indicator Overview

The STH/LTH Divergence indicator computes the ratio of short-term holder (STH) realised price to long-term holder (LTH) realised price. This metric highlights shifts in cost basis between speculative (STH) and committed (LTH) holders, signalling market regime changes.

How To Use

High divergence (darker purple above 10) indicates STH costs exceeding LTH, often marking euphoria and potential tops for exits, while low ratios (lighter purple near 0) suggest STH capitulation and bottoms for entries. Monitor spikes for overbought warnings or drops for oversold signals, using thresholds like >12 for bubbles or <2 for deep value. Combine with price crossovers of realised prices for confirmation, aiding cycle timing in Bitcoin markets.