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NewsBTC 2025-12-25 03:00:25

Bitcoin Price Trading Near ‘Fair Value,’ Says On-Chain Model

An on-chain pricing model for Bitcoin suggests that the cryptocurrency is currently neither overvalued nor undervalued, trading right around its “fair value.” Bitcoin Is Trading Near Its On-Chain Fair Value In a new post on X, cycle analyst Root has shared an update on how Bitcoin is looking from the perspective of the On-chain Value Map. This BTC valuation model was created by Root using three on-chain metrics: Realized Cap, Liquid Supply, and Coin Days Destroyed. Related Reading: XRP Retail Turns Fearful Again—A Classic Contrarian Setup? First, the “Realized Cap” is a capitalization model that calculates the cryptocurrency’s total value by assuming that the value of each token in circulation is equal to the spot price at which it was last transacted on the blockchain. In simple terms, what this indicator reflects is the amount of capital that the investors as a whole used to purchase the BTC supply. The second metric, the “Liquid Supply,” tracks the part of the BTC supply that’s held by investors who often move their coins. Basically, this is the supply that’s likely to return back into circulation, rather than being “HODL’d” Finally, the “Coin Days Destroyed” (CDD) measures the number of coin days being reset across the network. A “coin day” is a quantity that 1 BTC accumulates after 1 day of dormancy. When a token carrying some number of coin days is transacted, its coin days counter resets back to zero, and the coin days that it was holding are said to be “destroyed.” The CDD is useful for spotting periods where long-term holders are participating in distribution. These diamond hands hold for long spans, so they naturally accumulate a large amount of coin days, which, when destroyed, produce a spike in the CDD. Now, here is the chart for the On-chain Value Map shared by Root, which combines the data of all these Bitcoin indicators to define a few different valuation levels: As displayed in the above graph, Bitcoin spiked above the “overvalued” level as it set its all-time high (ATH) back in October. Since then, the cryptocurrency has notably declined, with its price returning to the level corresponding to “fair value” on the model. Related Reading: Bitcoin Perps Heat Up Again As Leveraged Longs Rise Thus, it would appear that, at least from the perspective of the On-chain Value Map, the asset is currently neither undervalued nor overvalued, but pretty much neutral. Given this trend, it remains to be seen which direction the coin will head from here. BTC Price Bitcoin has been in a phase of consolidation since its low in November, but its price hasn’t diverged much from the On-chain Value Map’s fair value during this period. Currently, it’s trading around $87,600. Featured image from Dall-E, BitcoinStrategyPlatform.com, chart from TradingView.com

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