The Realized Value Model is an on-chain analytical framework that assesses the aggregate cost basis of all cryptocurrency units in circulation, valuing each unit at the price it last moved on the blockchain. This model provides a more conservative and historically grounded valuation compared to market capitalization. It offers insight into the collective acquisition price of the market. This model helps filter out speculative noise.
Context
Crypto analysts frequently employ the realized value model to identify periods of undervaluation or overvaluation within the market, as well as to detect potential market bottoms. Its application in news helps interpret long-term market trends and assess the underlying economic activity of a digital asset. This model is a key tool for understanding fundamental market health.
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