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

An on-chain model suggests Bitcoin's price is at a fair value, not over or undervalued. This model, created by Root, uses three metrics: Realized Cap, Liquid Supply, and Coin Days Destroyed. Realized Cap reflects the total capital invested in Bitcoin, estimating the value based on last transaction prices. Liquid Supply tracks the portion of Bitcoin likely to be actively traded by investors. Coin Days Destroyed (CDD) measures the dormancy of coins, indicating when long-term holders sell. The On-chain Value Map combines these metrics to define valuation levels, showing Bitcoin previously reached overvalued territory. Bitcoin has since declined, currently trading near the "fair value" level on the model. This suggests the asset is neither excessively priced nor underpriced according to this analysis. Bitcoin's price has been consolidating since November, closely mirroring the fair value on the map. It is presently trading around $87,600. The future price direction remains uncertain, based on this on-chain valuation.