Definition ∞ The on-chain demand floor represents a theoretical minimum price level for a digital asset, supported by the collective buying activity and accumulation patterns observed directly on the blockchain. This concept suggests a price point below which significant holder cohorts are unlikely to sell, or where substantial new buying interest emerges. It is derived from analyzing various on-chain metrics.
Context ∞ Analysts frequently assess the on-chain demand floor for cryptocurrencies like Bitcoin to identify potential support levels during market corrections. Metrics such as realized price, cost basis of different holder groups, and accumulation trends inform this assessment. A strong on-chain demand floor can indicate underlying market strength and provide a basis for predicting price stability even amidst broader market volatility.
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