adminIn recent developments, 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. 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. 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.
Looking closer, market participants highlight key drivers such as liquidity flows, macro risk appetite, regulatory headlines, and on-chain activity. Short-term swings often reflect liquidation cascades and funding imbalances, while spot volumes and exchange inflows set the broader tone.
Analysis: The medium-term picture hinges on whether buyers can sustain momentum without excessive leverage. If flows continue favoring majors like BTC and ETH, altcoins could experience a staggered rotation instead of a broad-based rally. Meanwhile, policy clarity in key jurisdictions remains a decisive catalyst; clearer rules typically compress risk premia and attract institutional allocations. Beyond price action, on-chain metrics such as active addresses, fees, and stablecoin velocity help validate trend strength.
Outlook: Over the next few weeks, observers will watch price acceptance above recent resistance, derivatives positioning, and ETF-related flows. A constructive setup would feature rising spot demand, contained leverage, and improving breadth across sectors such as DeFi, infrastructure, and Layer-2 ecosystems.
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