Definition ∞ New investor cost basis represents the average price at which recently entered market participants acquired their digital assets. This metric provides insight into the aggregate entry price of newer market participants, offering a perspective on their current profitability or losses. It is often calculated by tracking the realized price of coins that have moved for the first time in a certain period. Understanding this value helps assess the psychological support levels where new investors might be motivated to hold or sell their assets.
Context ∞ Cryptocurrency news and on-chain analysis often reference the new investor cost basis to gauge market sentiment and identify potential support or resistance levels. If the market price approaches this cost basis, it can indicate a critical zone where recent buyers might defend their positions or capitulate. This metric is a valuable tool for understanding the behavior of market entrants and their impact on price action.
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