7 On-Chain Metrics Every Crypto Investor Should Watch
7 On-Chain Metrics Every Crypto Investor Should Watch
On-chain analysis involves examining the data on a public blockchain to gauge the health and activity of the network. These metrics can provide valuable insights that aren’t visible on a standard price chart.
Key Metrics to Follow
- Transaction Count & Volume: Shows the basic level of network activity.
- Active Addresses: The number of unique addresses participating in transactions, indicating user engagement.
- Hash Rate & Network Difficulty: A measure of the network’s security and computing power (especially for PoW chains like Bitcoin).
- Exchange Inflow/Outflow: The amount of a coin being sent to and from exchanges, signaling potential buying or selling pressure.
- MVRV Ratio (Market Value to Realized Value): Compares the current price to the average price at which coins were last moved, helping to identify market tops and bottoms.
- NVT Signal (Network Value to Transactions Signal): A variation of a P/E ratio for crypto, it can indicate when an asset is over or undervalued.
- Holder Concentration: Shows the distribution of coins and can indicate the risk of whale manipulation.