Supply in Loss

Supply in Loss Indicator

The Supply in Loss is an on-chain metric that measures the proportion of the total circulating supply that is currently held at a loss compared to the acquisition price. This indicator provides insights into the overall market sentiment, stress levels, and potential capitulation risk across all holders — both short-term and long-term.

Steps to Use the Supply in Loss Metric

1. Understand the Concept:

• Supply in Loss: The share of the circulating supply where the current market price is lower than the cost basis (last moved price) of those coins.

• Relevance: Reflects the extent of unrealized losses across the network, helping identify phases of fear, capitulation, and potential market bottoms.

2. Interpret the Supply in Loss Metric:

• High Supply in Loss: Indicates widespread unrealized losses, often associated with bearish phases and capitulation events.

• Low Supply in Loss: Suggests most of the supply is in profit, typically aligning with bullish conditions and market confidence.

• Rapid Increases: Occur during sharp market corrections, highlighting growing stress among holders.

• Sharp Declines: Seen during rallies, as coins return to profitable territory

3. Analyze Historical Patterns:

• Bear Market Lows: Supply in loss tends to peak during capitulation phases, often aligning with macro market bottoms.

• Bull Market Runs: Low levels of supply in loss are common, as most participants hold profitable positions.

• Cycle Transitions: Fluctuations in supply in loss can help identify shifts between bearish capitulation and bullish recovery.

4. Make Decisions:

• At Market Bottoms: Extremely high supply in loss may signal exhaustion of selling pressure and potential accumulation opportunities.

• During Recoveries: Falling supply in loss can confirm improving market sentiment and stronger price support.

• In Corrections: Rising levels may warrant caution, as unrealized losses could trigger sell-offs or panic selling.

Tips:

• Pair with Supply in Profit: Analyzing both together gives a full picture of the network’s profitability landscape.

• Context Matters: High supply in loss during early bear markets may deepen further, while at late stages it often marks capitulation.

• Watch Long-Term Trends: Persistent declines in supply in loss are strong indicators of recovery phases.

• Combine with Holder Metrics: Compare with long-term vs short-term holder supply to identify who bears the bulk of the losses.

• Track Over Cycles: Peaks and troughs in supply in loss are closely tied to historical market cycle extremes.

Created By:The Supply in Loss indicator is a widely recognized on-chain tool .