Blockchains show us the transparent trail of all transactions to have ever occurred, they cannot be hidden. This allows on-chain analysts to deduce probable market moves that are underway. Below there will be a number of Metrics that Cryptonary uses to analyse the on-chain flows on both Bitcoin and Ethereum. This guide will act as a glossary, explaining what each metric is.
Exchange Net Position Change
The Exchange Net Position Change is the measurement of coins flowing in and out of exchange wallets to or from cold storage wallets. If the amount of Bitcoin or Ether flowing from exchange wallets into cold storage wallets is greater than the amount of Bitcoin or Ether flowing in the opposite direction, this will result in a Net Withdrawal of Bitcoin/Ether from Exchange Wallets. This is often represented by red spikes on graphs (Glassnode). Green spikes on the other hand are representative of when more Bitcoin/Ether is flowing into Exchange Wallets (to likely be sold) than Bitcoin/Ether flowing out of Exchange Wallets.
Exchange Balance (%)
The Exchange Balance (%) is defined as the percent of the supply that is held in Exchange addresses. An up trending orange/blue line indicates an increase in the circulating supply being on Exchanges and a down trending orange/blue line indicates a decrease in the supply of Bitcoin/Ether on exchanges.
Large Wallet Inflows
Bubbles on the graphs (from WhaleMap) indicate locations at which large BTC holders accumulated more coins. The larger the blue bubble, the larger the amount of Bitcoins purchased at that price and given point in time.
This shows how many large transactions are moving on the blockchain.
Lifespan/Spent Output Age Bands
Lifespan is the categorisation of all spent outputs that were created in that specific period of time. This allows for analysts to split coin spending into different cohorts of coin ages. As a result, this shows the analysts the age of coins and how they are being spent. If there are large spikes in the graph, this shows that there are lots of BTC/ETH are being moved/spent in that cohort.
The Spent Output Profit Ratio is computed by dividing the realised value, divided by the value at creation of a spent output. It is the profitability of spent Bitcoin relative to the realised value on a daily basis.
The number of unique addresses that were active in the network either as a sender or a receiver.
The number of unique addresses that appeared for the first time in a transaction of the native coin in the network.
The Funding Rate is a mechanism to ensure that the Perpetual Futures Contract price stays near the Spot price. All crypto derivative exchanges use a funding rate on perpetual Contracts. The funding rate is set by the market and varies over time. When the funding rate is positive, longs pay shorts and vice versa.
Coin Days Destroyed
Coin Days Destroyed for any transaction is calculated by the number of coins in a transaction and multiplying them by the number of days since these coins were last spent. This allows analysts to see what age of coins are being transacted. Large spikes indicate old coins are being spent which can indicate that long-term holders are selling their coins.
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