onchain-analysis

# On-Chain Data Analysis

## Overview

Use transparent public blockchain data for analysis, covering network activity, whale-behavior tracking, DeFi liquidity analysis, and on-chain valuation metrics. This provides crypto investing with data dimensions unavailable in traditional finance.

## Network Activity Metrics

### Core Activity Indicators

| Metric | Meaning | Bullish Signal | Bearish Signal |
|------|------|---------|---------|
| Active addresses | Unique addresses interacting with the network each day | Sustained increase (network adoption rising) | Sustained decline |
| New addresses | Addresses appearing for the first time each day | Accelerating growth (new users entering) | Shrinkage |
| Transaction count | Number of on-chain transactions per day | Steady growth | Sharp decline |
| Transfer value | Total value transferred on-chain per day | Large-value transfer activity | Inactive |
| Activity / price ratio | Growth in active addresses vs growth in price | Activity growth outpaces price growth | Price rises but activity does not |

### Activity Analysis Framework

```
Healthy bull market:
  Price↑ + active addresses↑ + new addresses↑ = driven by real demand

Bubble signal:
  Price↑ + active addresses↓ or flat = capital-driven, not user-driven

Bottoming signal:
  Price↓ + active addresses bottom out and stabilize = speculators exit, real users remain
```

### Historical Reference for BTC Active Addresses

| Phase | Active Addresses (daily avg) | BTC Price | Meaning |
|------|--------------|---------|------|
| 2020 bear-to-bull transition | 0.8-1.0 million | $10k-$20k | Bottom stabilization |
| 2021 bull market | 1.0-1.3 million | $30k-$69k | Healthy growth |
| 2022 bear market | 0.8-0.9 million | $16k-$30k | Pulled back but did not collapse |
| 2024 bull market | 0.9-1.2 million | $40k-$100k | Institution-driven |

## Whale Tracking

### Whale Definition

| Tier | BTC Holdings | ETH Holdings | Estimated Count |
|------|---------|---------|---------|
| Super whales | >10,000 BTC | >100,000 ETH | ~100 |
| Large whales | 1,000-10,000 BTC | 10,000-100,000 ETH | ~2,000 |
| Mid whales | 100-1,000 BTC | 1,000-10,000 ETH | ~15,000 |
| Small whales | 10-100 BTC | 100-1,000 ETH | ~150,000 |

### Whale Behavior Signals

```
Bullish signals:
1. Whales withdraw from exchanges -> intent to hold long term
2. Whale-wallet count rises -> institutions / large holders accumulating
3. Exchange BTC balance keeps falling -> lower available supply
4. Long-term holder (LTH) balances rise -> smart money buying

Bearish signals:
1. Large whale transfers into exchanges -> preparing to sell
2. Dormant addresses wake up and transfer -> early holders taking profits
3. Exchange balances surge -> sell pressure is about to be released
4. Miner balances fall and move to exchanges -> miner capitulation / profit taking
```

### Large Transfer Monitoring

```
Thresholds to watch:
- BTC: single transfer > 500 BTC (about $50M)
- ETH: single transfer > 10,000 ETH (about $30M)
- USDT: single transfer > $50M

Transfer-direction analysis:
- Wallet -> exchange: potential selling (bearish)
- Exchange -> wallet: withdrawal to hold (bullish)
- Exchange -> exchange: arbitrage transfer (neutral)
- Wallet -> wallet: OTC trade (watch follow-up behavior)
```

## DeFi Liquidity Analysis

### TVL (Total Value Locked)

```
TVL = total value of assets locked in DeFi protocols

TVL analysis dimensions:
1. Total TVL trend: rising = capital flowing into the DeFi ecosystem
2. Cross-chain TVL: market-share changes among ETH vs Solana vs Arbitrum
3. Protocol TVL ranking: leading protocols such as Aave / Lido / Maker
4. TVL / market cap ratio: similar to asset-utilization rate in traditional finance
```

### DEX Liquidity Metrics

| Metric | Meaning | Focus |
|------|------|--------|
| DEX volume | Daily decentralized-exchange volume | Trend in DEX / CEX ratio |
| Liquidity depth | Size of AMM liquidity pools | Bigger pools = lower slippage = better |
| LP yield | Annualized return for liquidity providers | Abnormally high = unsustainable |
| Impermanent loss | Opportunity cost for LPs | More severe when volatility is higher |

### Stablecoin Liquidity

```
Stablecoin inflows = "dry powder" for the crypto market

Metrics to watch:
1. Changes in total USDT / USDC supply
2. Stablecoin balances on exchanges
3. Stablecoin mint / burn activity (Tether / Circle)
4. Stablecoin market-cap share (lower = higher risk appetite)

Signals:
- Heavy stablecoin minting -> capital preparing to enter
- Exchange stablecoin balances up -> buying power is accumulating
- Stablecoin share rising quickly -> risk-off market (capital rotating from coins into stablecoins)
```

## On-Chain Valuation Metrics

### MVRV (Market Value to Realized Value)

```
MVRV = market cap / realized cap

Realized cap = Σ(each UTXO × price at last movement)
             = sum of all holders' cost basis

| MVRV | Meaning | Historical Signal |
|------|------|---------|
| > 3.5 | Severely overvalued, large unrealized profits across holders | Historical top zone |
| 2.0-3.5 | Richly valued, most holders in profit | Mid-to-late bull market |
| 1.0-2.0 | Reasonable range | Normal market or early bull market |
| < 1.0 | Undervalued, most holders underwater | Bear-market bottom zone |

Signal logic: MVRV > 3.5 -> most holders have large unrealized gains -> strong incentive to sell -> potential top
              MVRV < 1.0 -> most holders are losing money -> unwilling to sell -> potential bottom
```

### NVT (Network Value to Transactions)

```
NVT = market cap / daily on-chain transfer value

Similar to a PE ratio in traditional finance:
- High NVT: market cap is high relative to on-chain activity (overvalued or optimistic on future growth)
- Low NVT: market cap is low relative to on-chain activity (undervalued or value-like)

NVT Signal (improved):
NVT_Signal = market cap / MA(90, daily on-chain transfer value)
Use a 90-day moving average to smooth noise

| NVT Signal | Meaning |
|------