On chain forensics

On chain forensics

What is on-chain forensics?

On-chain analysis examines thefundamental factors of cryptocurrencies to enhance trading and investmentdecisions. 

Crypto is the first assetclass where investor activity data can be extracted from huge data sets onevery asset’s blockchain. And, as blockchains are transparent ledgers, dataheld on them is verifiable and cannot be faked.

How does it work?

On-chain analysts look at allthe data stored on the blockchain to measure investor sentiment andbehaviour. 

They take this data liketransaction patterns, the classes of investors using the asset, and how they’reusing it. They then filter and segment it to identify behavioural patterns.These patters may help to predict an asset’s future price. 

Why is it important?

On-chain forensics is avaluable tool that allows investors to identify and separate a cryptocurrency’sspeculative value from its utility value.

It can be used to identifyundervalued and overvalued coins and determine whether an asset’s current pricecan be justified by its fundamentals.

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