Short-Term Holders Are Actively Realizing Losses

A week ago, short-term holders were sending coins to exchanges at a profit. Now, the balance has shifted toward losses. The 24-hour inflow balance has turned negative.

TL;DR

Short-term holders continue to send coins to exchanges at a loss. We examine the size of this imbalance and what would signal that it is easing.

Bitcoin STH Net Profit

On October 27, the 24-hour inflow balance stands at -18.6K BTC, compared with +10.4K BTC a week earlier. The indicator tracks inflows of coins younger than six months, with a negative reading indicating that coins moved at a loss dominate exchange inflows.

On October 26, the balance fell to -23.1K BTC. The negative imbalance has since narrowed but remains substantial, as it has since August of this year. A return above zero would show that inflows associated with profit-taking are dominant again.

Bitcoin STH Exchange Inflow Profitable Hours

Over the week ending October 27, the indicator fell from 75% to 16%. Most exchange inflows are now associated with realized losses.

A return above 50% would show that most inflows once again occur during periods of profit-taking. Below that level, losses continue to dominate.

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FAQ

Does a negative balance mean that 18.6K BTC were sold at a loss? No. This is the balance of exchange inflows, not confirmed sales volume. Sending coins to an exchange does not mean they have been sold.

Does a 16.4% share mean that this percentage of holders is in profit? It shows the share of inflows that occurred during periods of profit-taking. It is currently at its lowest level.

Conclusions

Short-term holders are sending coins to exchanges at a loss. The negative imbalance has narrowed since the October 26 low, but stress persists. A return of Profitable Hours above 50% and the balance above zero would show that profit-taking is dominant again. The main risk is a renewed increase in inflows associated with realized losses.

Live Charts

Explore the metrics behind this brief with live, auto-updating charts:

STH-SOPR - Short-term holder profit/loss behavior around the 1.0 breakeven threshold.
Exchange Netflow - Net BTC moving to and from exchanges across positive and negative flow regimes.
SOPR - Spent Output Profit Ratio shows whether moved coins realize profit or loss.
Supply in Loss - Share of supply held at a loss to flag stress and capitulation zones.