On-Chain Loss Dominance describes a market condition where the total value of assets moved on-chain at a loss significantly surpasses the total value moved at a profit. This metric reflects widespread selling by holders who are currently underwater on their investments. It indicates a period of strong negative sentiment and potential capitulation across the market. Such dominance often precedes a market bottom.
Context
Analysts use on-chain loss dominance as a key indicator to gauge the severity of market downturns and identify potential turning points. High loss dominance suggests that weak hands are exiting the market. Monitoring this metric provides valuable insights into investor psychology and the overall health of an asset’s holder base.
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