Adjusted Average Cost
Overview
Adjusted Average Cost represents a refined version of the Total Average Cost metric, excluding tokens held in dead wallets, token contract addresses, and DEX pool wallets. This adjusted calculation provides a more accurate representation of active market participants' average investment cost.
Definition
Adjusted Average Cost is calculated by determining the weighted average acquisition price of all tokens currently held by active wallets, based on the market price at the time each token was transferred to its current holder.
Significance
- Active Market Sentiment: Reflects the cost basis of actual traders and investors
- Realistic Support Level: Provides a more accurate psychological price floor
- Investment Benchmark: Represents the true average entry price of active participants
- Market Health Indicator: Offers insights into genuine holder dynamics without distortion
Calculation Method
The indicator follows the same weighted-average methodology as Total Average Cost, but specifically excludes: - Dead wallets - Token contract addresses - DEX liquidity pool wallets - Other non-market-participant addresses
Each acquisition by remaining wallets is weighted by: 1. The quantity of tokens acquired 2. The market price at the time of acquisition
Interpretation
- Comparison with Total Average Cost: Differences highlight the impact of excluded wallets
- Price Above Adjusted Average Cost: Indicates that the average active holder is in profit
- Price Near Adjusted Average Cost: Creates support level based on active market participants
- Price Below Adjusted Average Cost: Suggests active holders are at a loss, potentially creating selling pressure
Considerations
- Regular updates are required as wallet classifications change
- May require blockchain-specific adjustments to identify certain contract types
Related Indicators
Parameters
This indicator uses the base parameters for time range and resolution settings, with additional parameters for wallet classification.