Identifying Seller Exhaustion Across Multiple Timeframes

Using our new Breakdown Metrics, we are now able to discretely isolate points of severe unrealized loss, and investor capitulation. In this article, we introduce a new framework to assess seller exhaustion across multiple timeframes and investor cohorts.

Executive Summary:

• During a Bull Market regime, long-term investors are generally highly profitable. Therefore, the dominant source of realized loss originates from the Short-Term Holder cohort, which can provide information on inflection points during sell-off events.

• Given that market inflection points unfold from the inside-out, we produce a framework using our newly released Breakdown by Age metrics to profile seller exhaustion across day trader and weekly-monthly investor cohorts.

• Within this framework, we utilize onchain metrics to assess both the unrealized and realized losses of the targeted investor classes as a gauge for their response to market downturns.

We hope you've enjoyed this excerpt from our Week On-Chain Newsletter. If you'd like to dig deeper, you can read the full article here.