An on chain price model is an analytical framework that uses data directly recorded on a blockchain to derive insights into an asset’s fair value or support levels. These models leverage metrics such as the realized price, which reflects the average cost basis of all coins on the network, or the aggregate value of transactions. They offer a unique perspective on market dynamics, distinct from traditional technical analysis that relies solely on exchange price action. This approach provides a fundamental valuation perspective.
Context
On chain price models are widely utilized by cryptocurrency analysts to assess Bitcoin’s underlying value and predict potential market bottoms or tops. News frequently references these models, such as the Realized Price or MVRV ratio, to explain current market conditions. The discussion often centers on the predictive power of these models and their utility in understanding investor behavior.
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