The STH Realized Price is an indicator that is used to analyze the behavior of short-term investors in the Bitcoin market.
And it is the average price at which the hodlers who have bought their bitcoins in the last 155 days (in my chart they are between 30 and 90 days) have bought their bitcoin.
It is calculated by taking the market value of all coins that have been hodled in that time period and dividing that value by the number of coins that have been hodled for that time period.
It indicates the profitability of the short-term hodlers, since when the STH Realized Price is above the current market price, it means that the short-term hodlers are generally in losses. Conversely, when the STH Realized Price is below the current market price, it means that short-term hodlers are generally in profit.
Historically it has been one of the best indicators to identify trend changes, if the STH Realized Price crosses above the current market price it can be a sign that the market is in a moment of capitulation and that short-term hodlers are beginning to liquidate their positions which leads to a drop in price and the beginning of a bearish stage and on the contrary when the STH Realized Price crosses below the price, the STH hodlers are at a loss and stop selling BTC and indicates the beginning of a bullish stage.
Overall, the STH Realized Price is a useful tool for traders and analysts who want to understand short-term hodler sentiment and to identify market turning points.
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