Indicator Overview

The indicator calculates the percentage drop (drawdown) of the Short-Term Holder (STH) Realised Price from its own historical All-Time High (ATH).

The STH Realised Price tracks the aggregate cost basis of all coins held for less than 155 days. When the STH Realised Price experiences a deep drawdown, it signifies that even the most recent, speculative buyers are collectively underwater (at a loss) relative to previous peak speculation, indicating intense market fear and capitulation.

How To Use

The STH Drawdowns indicator is a highly effective tool for identifying bear market bottoms and major accumulation zones. Historically, bear market bottoms are established when the drawdown reaches the -60% to -65% level (deep red zone). This signals that the average short-term holder has endured catastrophic losses and selling pressure has likely exhausted itself. Green zone readings indicate the STH cost basis is at or near its all-time high, signaling a peak in speculative exuberance and potential local or cyclical tops.