Definition ∞ Market Value Floor represents a theoretical or observed minimum price level that a digital asset is expected to maintain, often based on fundamental metrics or strong holder conviction. This concept suggests a point below which selling pressure is likely to diminish, as buyers perceive the asset as undervalued or its underlying utility provides a base level of support. It serves as an important psychological and analytical benchmark for investors. This floor can shift with market conditions and asset fundamentals.
Context ∞ The market value floor is a frequently discussed concept during bear markets or periods of significant price corrections, as investors seek to identify potential accumulation zones. Analysts often assess on-chain data, such as realized price or cost basis of long-term holders, to estimate where this floor might reside. The resilience of an asset above its perceived market value floor indicates strong holder resolve and potential for future price recovery.
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