Definition ∞ Short-Term Holder Losses refer to the unrealized or realized financial losses incurred by cryptocurrency investors who have held their assets for a relatively brief period, typically less than 155 days. This metric often indicates periods of market capitulation or significant price corrections, as newer market participants sell their holdings at a price lower than their acquisition cost. Analyzing short-term holder behavior provides insight into market sentiment and potential support or resistance levels. It can signal a cleansing of speculative positions.
Context ∞ Current market analysis frequently monitors short-term holder losses as an indicator of market bottoming processes or a sign of sustained selling pressure. A key discussion involves whether a significant increase in these losses precedes a market recovery, as weak hands exit their positions. Future market movements are often contingent on the reduction of short-term holder selling and the return of accumulation behavior.
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