A market utility signal is an indicator derived from on-chain data that reflects the practical use and functional demand for a digital asset. This signal goes beyond mere price action to assess how actively and effectively a cryptocurrency or blockchain network is being utilized for its intended purpose. Examples include transaction volume, active addresses, developer contributions, and the number of decentralized applications built on the platform. A strong market utility signal suggests genuine adoption and a solid foundation for long-term value.
Context
Analysts frequently employ market utility signals to differentiate between speculative market movements and organic growth driven by real-world application. A divergence where price rises without a corresponding increase in utility signals can indicate an unsustainable bubble. Conversely, strong utility signals during a price decline might suggest an undervalued asset with significant long-term potential.
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