Short-Term-Supply
Short-Term Supply Indicator
The Short-Term Supply (STS) is an on-chain metric that tracks the proportion of coins currently held by short-term holders, typically defined as addresses holding coins for less than 155 days. This metric highlights the behavior of newer or more reactive participants who are more likely to sell during volatility. By monitoring short-term supply, traders and investors can gauge market sentiment, selling pressure, and the balance between speculative and conviction-driven holders.
Steps to Use the Short-Term Supply Metric
1. Understand the Concept:
Short-Term Supply (STS): The total number of coins held by addresses or entities that acquired them within the last 155 days.
Relevance: Reflects the influence of recent buyers and market newcomers, who often play a key role in driving short-term volatility and market swings.
2. Interpret the Short-Term Supply Metric:
High STS Share: Indicates a large proportion of coins are held by reactive participants, often linked with higher volatility and potential distribution phases.
Low STS Share: Suggests fewer coins are in the hands of short-term holders, typically aligning with strong long-term conviction and reduced sell pressure.
Rapid Increases in STS: Often occur during bull runs, when new participants flood the market.
Sharp Declines in STS: Typically seen in bear markets or during capitulation, when short-term holders exit and coins transfer to long-term holders.
3. Analyze Historical Patterns:
Bull Markets: STS tends to rise as new participants enter the market and speculate on short-term gains.
Bear Markets: STS declines as weak hands capitulate, consolidating supply into stronger long-term holders.
Cycle Turning Points: Sharp changes in STS often coincide with major shifts in market sentiment and direction.
4. Make Decisions:
During Rising STS: Be cautious of elevated volatility — newer participants may quickly react to price swings.
During Declining STS: Recognize the strengthening influence of long-term holders, which often stabilizes the market.
At Cycle Extremes: Use STS as a gauge of market maturity — peaks may suggest overheated speculation, while lows often signal capitulation and accumulation phases.
Tips:
Pair with LTS (Long-Term Supply): Comparing STS and LTS provides a clear picture of shifting ownership dynamics across cycles.
Watch Trend Changes: Rapid shifts in STS are often early indicators of changing market phases.
Context Matters: High STS isn’t inherently bearish — in early bull markets it reflects healthy new adoption, while in late cycles it can signal overheating.
Combine with Realized Price Metrics: Overlaying STS with realized price indicators adds clarity on whether short-term holders are in profit or loss.
Track Over Time: Continuous monitoring helps identify whether supply is consolidating into stronger hands or circulating among reactive participants.
Created By: The Short-Term Supply indicator is a widely used on-chain tool for understanding market structure and investor behavior.
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