Definition ∞ The realized price floor represents the aggregate cost basis of all coins or tokens currently held on a blockchain, calculated by taking the price at which each unit last moved on-chain. This metric serves as a strong indicator of the average acquisition cost for the entire market. It often acts as a significant support level during market downturns. This valuation method offers a macro perspective on investor sentiment.
Context ∞ Crypto news and on-chain analysis frequently reference the realized price floor when assessing market bottoms and potential recovery phases. It provides a robust, data-driven perspective on investor behavior and market psychology. When the market price falls below the realized price, it suggests that the average investor is holding at a loss. This metric is a key tool for understanding long-term market cycles and investor capitulation events.
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