ndicator Overview

The indicator measures the total unrealised loss currently held by Short-Term Holders (STHs) (coins held for less than 155 days) normalised against the Bitcoin market cap.

This metric is calculated by taking the STH Unrealised Loss in dollars and dividing it by the market capitalization. This ratio effectively compares the amount of latent loss held by the most volatile cohort to the total market size, adjusting for the network's growth over time.

How To Use

STH Relative Unrealised Loss is key for identifying capitulation and cycle bottoms. High readings (e.g., in the historical bottom zone) indicate that STH losses account for a historically large fraction of the market cap. This signals extreme financial pain for new buyers, often preceding major market bottoms as it represents the peak of 'weak hand' capitulation. Conversely, low readings (near zero) indicate minimal STH losses. This suggests the weakest hands have either exited the market or prices are so strong that almost all new buyers are in profit, which is bullish for continuation and occurs mainly during strong uptrends.