On-Chain Realized Loss

Definition ∞ On-chain realized loss refers to the aggregate value of losses incurred when cryptocurrency holders sell their assets for a price lower than their acquisition cost. This metric is calculated by analyzing transaction data recorded on the blockchain, specifically comparing the price at which coins last moved to the price at which they are currently spent. It represents actual financial losses that have been crystallized through selling. This indicator provides a clear measure of capitulation.
Context ∞ High levels of on-chain realized loss often signal periods of intense selling pressure and market capitulation, frequently observed during bear markets. News reports often highlight spikes in this metric as an indication of investor despair or a potential market bottom. Understanding realized losses helps analysts gauge the severity of market downturns and the emotional state of the investor base.