Definition ∞ An on-chain demand zone represents a price range where a significant volume of cryptocurrency was acquired by long-term holders directly on the blockchain. These zones are identified by analyzing transaction data, showing strong accumulation at particular price levels. When an asset’s price falls back into such a zone, it often encounters substantial buying pressure, acting as a support level. It indicates areas where strong holder conviction exists.
Context ∞ News reports and market analysis frequently reference on-chain demand zones to identify potential price floors and strategic entry points for investors. When an asset approaches an established demand zone, analysts observe whether buying activity increases, validating the zone’s strength. This concept is particularly relevant for understanding where significant market participants are likely to defend a price level, offering insight into market structure.
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