# 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 .


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