On-Chain Analysis: Basics for Traders

Technical Analysis looks at price. Fundamental Analysis looks at the project. On-Chain Analysis looks at the truth. Because the blockchain is a public ledger, we can see exactly where the money is moving before price reflects it.

Key On-Chain Metrics

1. Exchange Inflow/Outflow

• High Inflow: Whales are sending coins to exchanges. Why? Usually to Sell. Bearish Signal.
• High Outflow: Whales are moving coins to cold storage. They plan to hold long-term. Bullish Signal.

2. MVRV Z-Score

Compares the "Market Value" (price today) to the "Realized Value" (price when coins last moved).

• Historically, this has been the most accurate indicator for spotting Bitcoin market tops and bottoms.

3. Active Addresses

Is the network actually being used? Rising price with falling active addresses is a divergence (fake pump). Rising price with rising addresses is organic growth.

How We Use It

On-chain data is slow—it's not for scalping. It helps us define the "Bias" for our Swing Trading Strategies.

• If On-Chain is Bullish: We prefer Long signals.
• If On-Chain is Bearish: We prefer Short signals.

It's the ultimate filter for separating noise from signal.