STH Unrealized losses signal potential correction low

STH-Unrealized-losses-signal-potential-correction-low

While BTC continues to trade sideways between $85,000 and $92,000, STHs remain under pressure. 

With an estimated cost basis around $103,000, after adjusting for the impact of BTC moved by Coinbase, and a price near $88,000, the average unrealized losses for STHs stand at roughly 15%.

This calculation is simply based on the percentage deviation from the STH cost basis. Using this approach makes it possible to identify periods when the most reactive and sensitive investors in the market are under stress.

Historically, when STHs have experienced losses of this magnitude, meaning when unrealized losses exceeded the 15% threshold , they have already suffered significant drawdowns. 

These phases have often coincided with the formation of correction lows.

This could once again be the case. However, if BTC were to enter a deep and prolonged bear market, this type of signal would lose its effectiveness, so caution remains essential.