Darkfost2026-03-01

STH losses suggest a depressed market structure

With Bitcoin trading around $66,000, Short Term Holders (STH) are still largely holding at a loss. Their average unrealized loss currently stands at 26.3%, which is a relatively significant level. Periods where the average unrealized losses exceed 25% are most often associated with an advanced bear market phase. During bear markets, these unrealized losses can even reach extremes of around 40% for a short period of time. These phases, where STH begin holding substantial losses, have historically represented good opportunities for long term investors to accumulate through DCA, as this chart clearly illustrates. Another interesting point is the relationship between profits and price dynamics. When the average unrealized profit of STH moves back above 0%, that is typically when bullish trends have been able to develop. However, this only holds up to a certain point. When STH profits become too elevated, around 20% in this cycle, the risk of a trend reversal increases significantly. At the current stage, the trend should still be considered largely bearish, with STH holding historically high levels of losses. Nevertheless, these are also the periods where it makes sense to build exposure.