Definition ∞ STH Cost Basis, or Short-Term Holder Cost Basis, represents the average price at which short-term investors acquired their digital assets. Short-term holders are typically defined as entities that have held their assets for a period less than a specified duration, often 155 days. This metric provides insight into the aggregate profitability or loss of recent market entrants. It is a key on-chain indicator for assessing short-term market sentiment and potential selling pressure.
Context ∞ Crypto news frequently references the STH Cost Basis when analyzing market sentiment and predicting potential price movements, especially during corrections or rebounds. When the current market price falls below the STH Cost Basis, it indicates that short-term holders are generally at a loss, which can lead to increased selling pressure as they seek to exit. Conversely, a price above this level suggests short-term profitability, potentially encouraging further holding or profit-taking.
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