Definition. The STH Sell-Side Risk Ratio compares the total USD value realized by Short-Term Holders each day — the sum of their realized profits and realized losses — against the Short-Term Holder Realized Cap (orange line), with reference levels for low (red) and high (blue) value realization, and price in grey.

Technical. The ratio is smoothed with a 15-day SMA:

• STH Sell-Side Risk Ratio = sma((STH Realized Profit + STH Realized Loss) / STH Realized Cap, 15)
• STH Realized Cap = (Price / STH-MVRV) x STH Supply — i.e. the STH realized price multiplied by STH supply, reconstructed on-chart
• Reference levels: 0.1% (Low Value Realization, red) and 0.75% (High Value Realization, blue)

The realized profit and loss inputs are entity-adjusted (account-based).

Interpretation. This methodology quantifies the aggregate sell-side risk originating from the Short-Term Holder cohort. It assumes that all profit and loss realized on-chain is a potential source of sell-side pressure, and division by the cohort's realized cap normalizes the measure across time as capital flows in and out of the asset:

• ↗️ High values indicate periods of heavy value realization by recent buyers — Short-Term Holders locking in outsized profits or losses relative to their invested capital. This is typical of high-volatility phases such as late-stage rallies and sharp corrections, and can signal an oversupply of coins and a relatively high risk environment.

• ↘️ Low values indicate that most STH coins are transacting close to their break-even basis, and relatively low market volatility. This is typical of market consolidation phases, sideways market trends, and protracted bear markets, and tends to align with equilibrium being re-established as gradual accumulation takes place.

Notes. Coined by Mikołaj Zakrzowski (2022) — see Introducing Bitcoin Sell-Side Risk. The market-wide version is Sell-side Risk Ratio and the Long-Term Holder version is Long-Term Holder Sell-side Risk Ratio. Built from STH Realized Profit, STH Realized Loss, STH-MVRV and STH Supply.