Definition ∞ On-chain price models are analytical frameworks that derive valuations or predict future price movements of digital assets using data directly recorded on their respective blockchains. These models utilize metrics such as transaction volume, active addresses, mining costs, and investor profitability to provide unique insights into market behavior. They offer a fundamental perspective distinct from traditional technical analysis.
Context ∞ Cryptocurrency news frequently references on-chain price models to offer a deeper, data-driven understanding of digital asset valuations. These models, like Realized Price or MVRV, provide context for assessing whether an asset is overvalued or undervalued based on actual network activity and investor cost bases. Such analysis helps readers interpret market movements from a fundamental perspective, offering a robust counterpoint to purely speculative narratives.
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