STH Supply in Loss

Definition ∞ STH Supply in Loss refers to the total amount of a digital asset held by short-term holders that is currently valued below their purchase price. This on-chain metric tracks the portion of an asset’s circulating supply that short-term holders, typically defined as those holding for less than 155 days, possess at an unrealized loss. It indicates the collective underwater position of these newer market entrants. A high percentage of STH supply in loss often signals market stress and a potential for further selling pressure if prices do not recover.
Context ∞ In cryptocurrency markets, STH Supply in Loss is a critical indicator for assessing market sentiment and identifying potential capitulation events. News analysis frequently highlights this metric to explain market downturns, suggesting that a large number of recent buyers are experiencing losses. A significant increase in this supply can precede periods of intense selling, as these holders may be more prone to liquidating their positions to avoid deeper deficits.