This is a loss that occurs as a result of the decline in the value of an asset. It can be applied to stocks, bonds, cryptocurrency, and even real estate. The term, however, is most often applied to financial markets.
It is also something that is reflected in people's brokerage or trading accounts.
The key here is the asset was sold. Before selling it is an unrealized loss. Once the asset is moved, transactions moves to a realized loss.
This is something that more are going to have to learn about as the prevalence of digital assets increases.