What Is Realized Loss?
Realized loss measures the aggregate dollar value of losses locked in by coins that were moved on-chain at a price below their acquisition price. It quantifies the intensity of capitulation — how much money is actually being lost by participants who are selling at a loss or moving coins between wallets at depreciated values.
How Realized Loss Works
Realized loss is calculated by summing the difference between the price at which each output was created (bought) and the price at which it was spent (sold or moved), for all outputs that were spent at a loss during the period. Spikes in realized loss indicate mass capitulation events where holders are crystallizing significant losses.
Why It Matters for Traders
Extreme spikes in realized loss have historically marked major cycle bottoms. The logic is intuitive: maximum pain (maximum realized loss) occurs when the last holdouts finally capitulate. Once the sellers in the most pain have sold, there's no one left to push prices lower. Tracking the 30-day sum of realized losses alongside SOPR and NUPL provides a multi-dimensional view of capitulation completeness.
