Supply in Loss, as the name suggests, represents the absolute amount of coins in a given network which are currently in loss (i.e. the price at the time they were last moved is higher than the current price).
This metric is helpful in highlighting market bottoms by suggesting when investors might be ready to re-enter the market.
It is important to note that unlike Unrealized Loss, Supply in Loss does not account for the amount of loss - only the binary case of whether or not the coin is in loss.
Supply in Loss is calculated by determining which coins were last moved when the price was higher than the current price (i.e. the price has decreased since the coins were last moved). It represents the total absolute number of those coins.
Rafael Schultze-Kraft - Dissecting Bitcoin's Unrealised On-Chain Profit/Loss