STH Realized Loss refers to the total value of losses incurred by Short-Term Holders (STHs) when they sell their digital assets for less than their purchase price. Short-Term Holders are typically defined as entities holding an asset for less than a specific duration, often 155 days for Bitcoin. This metric indicates the extent of capitulation among newer market participants. A high STH Realized Loss signals significant selling pressure from this cohort.
Context
Crypto news often highlights STH Realized Loss as a critical onchain metric for gauging market sentiment and identifying potential market bottoms during downturns. A substantial increase in STH Realized Loss suggests that newer investors are exiting their positions, often due to panic or exhaustion. Analysts use this data to assess the health of market cycles and to anticipate periods of stabilization or reversal.
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