Definition ∞ A not overheated market describes a condition where the prices of digital assets have not experienced excessive or unsustainable rapid appreciation, indicating a balanced supply and demand dynamic. This state is characterized by a lack of extreme speculative fervor, reasonable valuation metrics, and a healthy distribution of profits among market participants. It suggests that the market has room for continued growth without an immediate risk of a sharp correction. Such conditions often present more sustainable investment opportunities.
Context ∞ Identifying a not overheated market is a key analytical objective for cryptocurrency investors, frequently discussed in news and market analysis. Metrics like the MVRV ratio, funding rates, and on-chain profitability are often used to assess whether market conditions remain balanced. The discussion frequently focuses on distinguishing between genuine organic growth and speculative bubbles that signal an overheated environment. A market that is not overheated is generally considered more conducive to long-term capital appreciation and reduced volatility.
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