Indicator Overview

The indicator calculates the percentage of the total BTC supply held by Short-Term Holders (STHs) that is currently at an unrealised loss. The metric is presented as a proportion between 0 and 1, providing a clear view of the short-term market's underwater status. A 7-day smoothing is applied to the data for trend clarity. High percentages signify deep investor distress and capitulation, while low percentages suggest minimal STH losses, often associated with bullish market phases.

How To Use

Historically high readings (approaching 1) are often zones of maximal fear, signalling potential cyclical bottoms and offering strong contrarian buying opportunities before a rebound. Conversely, if the metric reaches low levels (approaching 0), it implies most STHs are profitable and that the market may be nearing overextension, suggesting caution or a potential setup for a price correction. A rapid drop from high levels confirms that a capitulation event is occurring.