UnRealizedLoss_STH

Tech spec

Brief Description: The total unrealized losses held by Long-Term Hodlers.

UnRealizedLoss_STH represents the accumulated loss that investors would incur if all coins, which are currently valued at less than their purchase price, were sold at the current price. It is an on-chain metric that gives an overview of the theorical losses held across the LTH cohort.

Metric variants

• _lth: UnRealizedLoss_STH restricted to Long-Term Holders (age ≥ 155 days).
• _sth: UnRealizedLoss_STH restricted to Short-Term Holders (age < 155 days).

Interpretation UnRealizedLoss_STH provides valuable insights into sentiment and potential investor behavior. A high UnRealizedLoss_STH might indicate a high pain context, as investors are holding high losses, potentially leading to increased selling pressure and buying opportunity or conviction in HODLing for the most resilient participants. Investors and analysts use this metric to gauge the sentiment of the market and predict possible support or resistance levels depending on the financial stress among Bitcoin holders.

Advanced Explanation UnRealizedLoss_STH concentrates on the Bitcoin that is held at a loss. This metric aggregates the difference between the current price and the price at the time each a UTXO was created, but only for UTXOs that have not yet been spend, are in a state of loss.

If P(c) is the purchase price of UTXO u and P(current) is the current price of Bitcoin, UnRealizedLoss_STH can be calculated as follows:

UnRealizedLoss_STH = Σ [P(u) - P(current)] for all UTXOs where P(u) > P(current)

This sum runs over all UTXOs u that are being held at a loss at the time of calculation.