Long-Term-Supply in Loss

Long-Term Holder Supply in Loss Indicator

The Long-Term Holder (LTH) Supply in Loss is an on-chain metric that measures the total amount of coins held by long-term holders that is currently valued below their acquisition cost. It provides insights into the sentiment, behavior, and potential capitulation phases of long-term investors. This metric is particularly useful for identifying periods of market stress or accumulation opportunities.

Steps to Use the Long-Term Holder Supply in Loss Metric

1. Understand the Concept

• LTH Supply in Loss: The total supply of coins held by long-term holders whose current market value is lower than their realized value (the price at which the coins were last moved).

• Relevance: Highlights periods where long-term holders face unrealized losses, offering insights into market sentiment, holder resilience, and potential capitulation events.

2. Interpret the LTH Supply in Loss Metric

• Rising LTH Supply in Loss: Indicates increasing unrealized losses for long-term holders, typically observed during bear markets or after significant price corrections.

• Declining LTH Supply in Loss: Suggests improving market conditions, as prices recover and long-term holders regain profitability.

• Stable LTH Supply in Loss: Reflects consistent market conditions, often observed during consolidation phases.

3. Analyze Historical Patterns

• Bear Markets: High LTH Supply in Loss values align with periods of capitulation, signaling market bottoms or prolonged bearish sentiment.

• Bull Markets: Declining LTH Supply in Loss values reflect recovery phases, as prices rise and long-term holders move back into profit.

• Accumulation Phases: Sustained high LTH Supply in Loss values often indicate strategic accumulation by resilient holders during undervaluation periods.

4. Make Decisions

• During Bear Markets: Use rising LTH Supply in Loss values to identify capitulation phases, which often align with accumulation opportunities.

• During Bull Markets: Monitor declining values as a sign of improving market sentiment and confidence among long-term holders.

• During Neutral Markets: Observe stable values for indications of market equilibrium and potential breakout opportunities.

Tips:

• Combine with Other Metrics:

Use LTH Supply in Loss alongside metrics like Short-Term Holder (STH) Supply in Loss, Realized Price, and MVRV Ratio to gain a comprehensive understanding of market sentiment.

• Identify Capitulation Phases:

High LTH Supply in Loss values during bear markets signal capitulation, often presenting strategic buying opportunities for long-term investors.

• Compare Historical Trends:

Analyze LTH Supply in Loss trends across previous market cycles to identify recurring patterns and align strategies with historical data.

• Assess Holder Resilience:

Rising LTH Supply in Loss reflects the willingness of long-term holders to endure losses, indicating their confidence in the asset’s long-term potential.

• Monitor Recovery Phases:

Declining LTH Supply in Loss values during price recoveries signal improving sentiment and potential for bullish continuation.

How to Use the Indicator Effectively

• During Market Bottoms: High LTH Supply in Loss values reflect significant unrealized losses among long-term holders, often aligning with capitulation phases and accumulation opportunities.

• During Market Recoveries: Declining LTH Supply in Loss values indicate improving conditions and confidence among long-term holders, supporting bullish sentiment.

• During Consolidation Phases: Stable LTH Supply in Loss values reflect market equilibrium, offering a favorable environment for long-term planning and positioning.

Created By: This indicator is a widely recognized tool in blockchain analytics.