Definition ∞ A Statistical Z-Score measures how many standard deviations an observation is from the mean of a dataset. This statistical tool quantifies the deviation of an individual data point from the average value, normalized by the standard deviation of the dataset. It helps in identifying outliers or assessing the relative position of a data point within a distribution. In financial analysis, a Z-score can indicate whether an asset’s price or a market metric is unusually high or low compared to its historical norm.
Context ∞ Statistical Z-Scores are increasingly applied in crypto news for on-chain analysis, helping to contextualize various market metrics. Analysts use Z-scores to identify periods of extreme overvaluation or undervaluation for digital assets, such as Bitcoin’s market-value-to-realized-value ratio. The application of such statistical tools enhances the rigor and objectivity of market commentary.
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