Definition ∞ Price to value deviation quantifies the difference between a digital asset’s current market price and its assessed fundamental or intrinsic value. A positive deviation indicates potential overvaluation, while a negative deviation suggests undervaluation. This metric helps investors determine whether an asset is trading above or below its perceived fair worth. It is a key tool in fundamental analysis.
Context ∞ Crypto news and market analysis often discuss price to value deviation when evaluating investment opportunities or market health. Analysts use various on-chain metrics, development activity, and adoption rates to calculate an asset’s intrinsic value. Significant deviations can signal market inefficiencies or impending price corrections. Understanding this concept is vital for informed decision-making in digital asset markets.
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