Short-Term Holder Loss

Definition ∞ Short-term holder loss describes a situation where digital assets held by participants for a relatively brief period, typically less than 155 days, are currently valued below their acquisition price. This metric indicates unrealized losses for recent market entrants. A high prevalence of short-term holder loss often signals market capitulation or strong selling pressure. It can also precede a market reversal if short-term holders exit their positions.
Context ∞ Crypto news frequently references short-term holder loss as an on-chain indicator to gauge market sentiment and identify potential turning points. When a significant portion of short-term holders are in a loss position, it can suggest that the market is nearing a bottom as weaker hands sell off. Monitoring this metric helps analysts understand the psychological state of newer market participants and assess overall market health.