True_Market_MeanPrice

Tech spec

Brief Description: The aggregate cost basis of Bitcoin’s actively traded supply.

True_Market_MeanPrice, also known as the True Market Mean (of price) or Active-Investor Price, in Bitcoin on-chain analysis. It represents a refined approach to estimating the aggregate on-chain cost basis of the market. This metric is derived by isolating coins that have been spent, assumed sold, and thus transferred between investors (Investor Cap), excluding coins acquired through mining power expenditure (Thermocap).

It is based on the Cointime Economic framework.

Interpretation True_Market_MeanPrice is particularly useful for understanding the real economic value of Bitcoin as perceived by active traders and investors. It provides a more precise view of the market's valuation, excluding the influence of unspent mined coins. This metric can be especially insightful during market analyses, as it reflects the actual cost basis of Bitcoin's actively traded supply, offering a more grounded perspective on market dynamics and investor behavior.

Advanced Explanation The True_Market_MeanPrice is calculated by focusing exclusively on the portion of Bitcoin's supply that is actively traded and held by investors, rather than the entire circulating supply. This approach provides a more accurate representation of the market's cost basis, as it accounts for the economic activities of active investors while excluding the value of coins mined but not yet transacted.

True_Market_MeanPrice =  Investor Cap / Active Supply

Cointime Economics is a new framework for Bitcoin onchain analysis published by James Check and David Puell. References: https://ark-invest.com/white-papers/cointime-economics/ and https://insights.glassnode.com/introducing-cointime-economics/