Definition. Tracks how much of the short-term holder cohort's supply has fallen into unrealized loss.

Technical. Short-term holder supply and short-term holder supply held in loss are plotted directly, with the ratio between them — the percent of short-term holder supply in loss — smoothed by a 7-day EMA.

Interpretation. Short-term holders are the cohort that bought most recently and therefore the first to go underwater when a trend stalls. A rapid rise in the share of their supply held at a loss marks the point where the marginal buyer of the bull market stops being profitable, which is where the risk of reflexive selling is highest.