Realized Loss Margin

Definition ∞ Realized loss margin refers to the aggregate amount of financial losses incurred by market participants who have sold digital assets for less than their acquisition cost. This metric quantifies the actual losses locked in by investors during periods of price decline. A high realized loss margin often indicates significant selling pressure and capitulation events within the market. It reflects a period of substantial investor discomfort.
Context ∞ Crypto news frequently references realized loss margin during bear markets or significant price corrections to illustrate the extent of investor capitulation. On-chain analytics often track this metric to identify potential market bottoms or periods of extreme fear. Understanding realized loss margin helps assess the psychological state of the market and the potential for a rebound after severe downturns.