Indicator Overview

The indicator measures the net dollar value of profit or loss realised on-chain exclusively by Short-Term Holders (STHs), entities holding coins for less than 155 days.

This metric is derived by comparing the realised profits and realised losses from all STH transactions on a given day. This provides a high-impact gauge of the aggregate monetary volume of profit-taking (positive spikes) or loss-selling/capitulation (negative troughs) by the most speculative market cohort.

How To Use

Large positive spikes indicate mass profit-taking by STHs. These events usually coincide with phases of high market exuberance, acting as strong signs of local or major market tops as newer participants rush to lock in gains. Conversely, deep negative troughs signal heavy, aggregate loss-selling by STHs. This is symptomatic of a major capitulation event where weak hands panic sell at depressed prices. These events are historically characteristic of cyclical market bottoms, representing excellent contrarian buying zones. Periods where the STH NRPL line hovers close to zero indicate a balanced state where STH profit-taking is offset by loss-selling, typically observed during low volatility or consolidation phases.