Short-Term Holder Realized Loss

Definition ∞ Short-term holder realized loss quantifies the total financial losses incurred by investors who sell digital assets within a short holding period. This metric specifically tracks losses realized by entities holding an asset for less than a predefined duration, typically 155 days, when they move their assets at a price lower than their acquisition cost. It serves as an indicator of capitulation among newer market participants who entered at higher prices and are now exiting at a deficit. Significant spikes in this metric often coincide with market bottoms during bearish cycles.
Context ∞ In cryptocurrency market analysis, short-term holder realized loss is a key on-chain indicator for identifying periods of intense selling pressure and potential market exhaustion. News reports often cite this metric to explain why a market correction might be nearing its conclusion, as the weakest hands are flushed out. Monitoring this metric helps observers gauge the severity of downturns and anticipate potential shifts in market sentiment.