Indicator Overview

The indicator quantifies the absolute amount of circulating supply held by Short-Term Holders (STHs) that is currently sitting at an unrealised loss. The raw data is smoothed over a 7-day window to present a clearer trend. Rising values indicate increasing pain and capitulation among newer investors, a characteristic often observed during bear markets. Conversely, low values suggest minimal short-term holder losses, typically found during market rallies or extended periods of consolidation.

How To Use

High readings on this indicator signal that a significant portion of the STH cohort is underwater, which is often a historical prerequisite for a major market bottom formation. Traders should watch for the metric to peak and then begin to decline, suggesting losses have been realised and the worst of the sell-off may be over. Conversely, low readings imply complacency and a lack of market washout, increasing the probability of a corrective move to shake out weak hands.