Do you ever feel one step behind the crypto market? The space moves so fast and there are many narratives and indicators to keep up with. That’s just the tip of the iceberg.
On-chain analysis is the answer. You can identify more relevant data and cut out the noise.
Everyone’s heard of it, but few have learned about it, which is a shame. On-chain analysis is one of the best sources of alpha. Here’s your intro guide:
What is on-chain data?
On-chain data includes the information of every transaction that has occurred on a network. On public blockchains like Ethereum and Bitcoin, everyone can view these transactions.
On-chain metrics turn blockchain-based transaction data into actionable crypto market insights. We can pair indicators with fundamental and technical analysis to be better informed. We can follow smart money an capitalize on whale movements as well.
On-chain data comes in a three main forms:
- Raw data
- Aggregated data
- Entity data
Raw on-chain data
Some of the most simple metrics used to gauge network developments are the number of active addresses, the total wallets with a certain amount of bitcoin held, the amount of transactions happening on-chain, and the number of wallets with a non-zero balance.
Most of this data can be found with simple block explorers. It’s useful and a good place to start.
To get a better idea of how to leverage block explorers check out my Etherscan guide:
There are aggregated on-chain metrics that add more information on what is taking place.
There are several platforms and sources that have insightful charts and dashboards. This can help visualize blockchain data and track movements of crypto and individual wallets.