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On Chain Metrics
Blockchains show us the transparent trail of alltransactions to have ever occurred, they cannot be hidden. This allows on-chainanalysts to deduce probable market moves that are underway. Below there will bea number of Metrics that we use to analyse the on-chain flows on both Bitcoinand Ethereum. This guide will act as a glossary, explaining what each metricis.
Exchange Net Position Change
The Exchange Net PositionChange is the measurement of coins flowing in and out of exchange walletsto or from cold storage wallets. If the amount of Bitcoin or Ether flowing fromexchange wallets into cold storage wallets is greater than the amount ofBitcoin or Ether flowing in the opposite direction, this will result in a NetWithdrawal of Bitcoin/Ether from Exchange Wallets. This is often represented byred spikes on graphs (Glassnode). Green spikes on the other hand arerepresentative of when more Bitcoin/Ether is flowing into Exchange Wallets (tolikely be sold) than Bitcoin/Ether flowing out of Exchange Wallets.
Exchange Balance (%)
The Exchange Balance (%) isdefined as the percent of the supply that is held in Exchange addresses. An uptrending orange/blue line indicates an increase in the circulating supply beingon Exchanges and a down trending orange/blue line indicates a decrease in thesupply of Bitcoin/Ether on exchanges.
Large Wallet Inflows
Bubbles on the graphs (fromWhaleMap) indicate locations at which large BTC holders accumulatedmore coins. The larger the blue bubble, the larger the amount of Bitcoinspurchased at that price and given point in time.
Large Transactions
This shows how many largetransactions are moving on the blockchain.
Lifespan/Spent Output Age Bands
Lifespan is thecategorisation of all spent outputs that were created in that specific periodof time. This allows for analysts to split coin spending into different cohortsof coin ages. As a result, this shows the analysts the age of coins and howthey are being spent. If there are large spikes in the graph, this shows thatthere are lots of BTC/ETH are being moved/spent in that cohort.
SOPR
The Spent Output ProfitRatio is computed by dividing the realised value, divided by thevalue at creation of a spent output. It is the profitability of spent Bitcoinrelative to the realised value on a daily basis.
Active Addresses
The number of unique addressesthat were active in the network either as a sender or a receiver.
New Addresses
The number of unique addressesthat appeared for the first time in a transaction of the native coin in thenetwork.
Funding Rate
The Funding Rate is amechanism to ensure that the Perpetual Futures Contract price stays near theSpot price. All crypto derivative exchanges use a funding rate on perpetualContracts. The funding rate is set by the market and varies over time. When thefunding rate is positive, longs pay shorts and vice versa.
Coin Days Destroyed
Coin Days Destroyed for anytransaction is calculated by the number of coins in a transaction andmultiplying them by the number of days since these coins were last spent. Thisallows analysts to see what age of coins are being transacted. Large spikesindicate old coins are being spent which can indicate that long-term holdersare selling their coins.
