Definition ∞ The true market mean represents a calculated average price of an asset that aims to account for various factors beyond simple spot price, often incorporating on-chain data like realized price or cost basis of different holder cohorts. It provides a more comprehensive view of the market’s underlying value and investor profitability than a simple average. This metric helps identify periods of overbought or oversold conditions.
Context ∞ Analysts often reference the true market mean when evaluating the long-term valuation of cryptocurrencies, particularly Bitcoin, seeking to determine if the current price is above or below its fundamental investor cost basis. Its application helps to filter out short-term market noise and identify sustainable price trends.
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