Investor Loss

Definition ∞ Investor Loss occurs when the current market value of a digital asset falls below the price at which an investor acquired it. This represents an unrealized or realized reduction in capital for the holder. It can result from market downturns, poor investment timing, or a general decline in asset valuation. Periods of widespread investor loss often precede capitulation events and market bottoms.
Context ∞ Crypto news frequently reports on aggregate Investor Loss metrics, such as the percentage of addresses holding assets at a loss, to gauge market sentiment. This metric helps identify periods of significant financial stress among participants, which can influence future selling behavior or signal potential market reversals. Understanding the extent of investor loss is key for assessing market capitulation phases.