The cryptocurrency market is constantly evolving, with Bitcoin leading the way as the most recognized and traded digital asset. Among the many factors influencing Bitcoin’s price are the True Market Mean Price (TMMP) and the AVIV Ratio, two critical metrics that help investors assess market trends and profitability. In this article, we delve into these concepts and their implications for informed investment strategies.
What is the True Market Mean Price (TMMP)?
The True Market Mean Price (TMMP) represents the average acquisition price of Bitcoin investors, excluding miners. In December 2025, TMMP stood at $81,500, serving as a behavioral benchmark for the market. When Bitcoin’s price remains above this threshold, it typically indicates market stability, as investors actively defend their cost basis, limiting supply and encouraging price resilience during periods of sideways movement.
In contrast, when prices dip below the TMMP, it can signal a shift in market dynamics. Historical trends have shown that investors may exit their positions, flipping this level into resistance. This often leads to extended consolidation phases rather than dramatic breakdowns.
Understanding the AVIV Ratio
The AVIV Ratio is a metric used to gauge investor profitability and market conviction. It compares the active market valuation with the realized valuation, offering a more nuanced perspective than traditional momentum indicators. Current AVIV readings between 0.8 and 0.9 suggest a phase of consolidation, reduced volatility, and reallocation of holdings. These figures highlight investors’ cautious approach as profitability tightens and risk is reassessed.
Stabilizing AVIV levels during these conditions reflect an environment where investors are focused on sustaining their positions rather than chasing short-term gains. Conversely, if the AVIV Ratio compresses further while TMMP breaks, it typically signals weaker demand and fading profitability, which could lead to declining confidence in the market.
What Current On-Chain Metrics Indicate
Bitcoin trading activity has slowed considerably, with on-chain metrics pointing to a cautious sentiment among investors. Many are holding strong above the current TMMP while re-evaluating risk exposure. This environment suggests we are in a phase of measured decision-making rather than volatile or aggressive trading patterns.
Analysis from CryptoQuant notes that TMMP serves as a psychological boundary for Bitcoin’s market behavior. When the price hovers above this level, it indicates supply absorption and investor resilience. However, consistent trading below TMMP historically results in greater hesitation and longer consolidation periods.
Investor Takeaway
For cryptocurrency enthusiasts and long-term investors, keeping a close eye on TMMP and the AVIV Ratio can provide essential insights into market conditions and potential price movements. If Bitcoin stays above the TMMP and AVIV stabilizes, it reflects a healthy market poised for further resilience. Conversely, an extended breakdown in both metrics warrants caution, as it may signal fading conviction across the board.
Explore Cryptocurrency Resources
As you navigate the Bitcoin market, having reliable tools and strategies is essential. One excellent product for technical market analysis is the Cryptowatch Charting Tool. This platform offers real-time insights and data visualization to help investors make data-driven decisions in the ever-changing cryptocurrency landscape.
