do you ever feel like you’re one step behind one
step one step no matter how well you think you’ve timed the market the price always seems to move
in the opposite direction well you’re not alone every crypto investor has faced this at some
point but thankfully there is a solution onchain analysis onchain data offers powerful insights
into a project’s momentum and potential and this can be the difference between getting wrecked
and getting rich so today we’ll tell you about five of the most important onchain indicators you
should be using to maximize your gains my name is Nick and if you want to max those gains this is a
video you can’t afford to miss before we start you need to know that I am not a financial adviser and
nothing in this video should be taken as financial or investment advice this is purely educational
content designed to help you on your crypto quest with that out of the way let’s begin before you
yolo into any crypto investment it’s crucial to gather all the available information those soaring
green candles might suggest the asset is in a strong uptrend but charts only tell part of the
story to make informed trading decisions you need to look under the hood specifically on chain one
of the advantages of crypto is that transactions are publicly viewable on almost every blockchain
meaning you can see the flow of money between wallets and exchanges in real time and this opens
the door to some very powerful analysis tools as you might have guessed this data extraction
is known as onchain analysis but if the charts are already telling you that a crypto is going to
the moon then why should you care well put simply onchain data can quickly help you determine if the
rally is legit or just uh smoke and mirrors now I know what you’re thinking sifting through the
transaction history of every crypto I hold that would take forever don’t worry you won’t have
to dig through all that data manually there are plenty of indicators that transform raw blockchain
data into insightful charts and tools providing a bird’s eyee view of what’s happening on chain
armed with this information you can make more educated predictions about future price movements
so uh be sure to stick around until the end to see how you can combine these different analysis
tools to really grow your crypto portfolio so if daily active addresses and this can be found by
using blockchain explorers such as Etherscan for Ethereum or Sui Scan for yep you guessed it
SUI chances are that you’re already familiar with blockchain explorers if you’ve ever had to
check if your crypto transaction went through but chances are that you’ve never taken the time to
look through the analytics many of these explorers offer such as daily active addresses as the name
would suggest daily active addresses is the number of unique wallet addresses that have been active
over a certain period of time and this can include either sending or receiving funds each address
can be traced back to either an individual user or a collective entity but why is this important
well this metric gives you a sense of the activity levels of that network in essence it gives you an
idea of the real-time demand of that coin or token which often reveals much more information than
simply looking at the charts more often than not there’s a clear correlation between the number
of active addresses and a crypto’s price more active addresses means there’s more demand for
that crypto and more demand means that prices are likely to go up on the flip side a declining
number of daily active addresses suggests that the demand for that crypto is falling and prices
are likely to fall as well and this alone is why watching the daily active address count is useful
but uh that’s only half of the reason there are other ways the indicator can give you an important
insight into that crypto’s future price action for instance if you see that prices are rising
but the number of daily active addresses has stayed relatively flat then more often than
not this signals that prices are actually being manipulated by whales naturally these rallies
are not sustainable and a price reversal could be imminent put differently this could be a trap
to draw in exit liquidity and if you don’t spot this soon enough you could be the one left
holding the bag conversely if you see that a crypto’s price is falling but the number of daily
active addresses is rising then this is actually a bullish signal and that’s because it signals that
demand is rising suggesting that a reversal to the upside could happen at any moment and this could
help you identify key opportunities to buy the dip which could translate into some massive gains
and speaking of gains if you want to maximize total value locked or TVL and this is a metric
used to determine the total value of digital assets locked or staked within a particular DAP
or D5 protocol you can easily track TVL using DY analytics platforms like Coin Gecko DY Llama
or for layer 2 solutions L2B and these platforms offer realtime updates breaking down TVL by
blockchain protocol and even by individual tokens making it easier to spot trends and liquidity
shifts tvl is powerful because it reflects the amount of native liquidity within an ecosystem
however it’s important to note that TVL is often influenced by the token’s price so if the token’s
price drops the TVL will also drop even if the same number of tokens remain locked and this is
important because focusing only on dollar values can give a false impression of growth similarly
if the TVL in dollar terms drops but the number of locked tokens remains the same then this suggests
that the problems are with the cryptocurrency and not with the protocol itself and that’s why it’s
best to pay attention to TVL in crypto terms and not just in dollar terms so then what should
you look for with TVL well ideally you want to see TVL rising faster than the token’s price
and this often indicates growing utilization and borrowing within the crypto ecosystem
especially in DeFi platforms as signaling real native liquidity and strong demand a good
way to gauge this demand is by examining leading protocols noted on each blockchain on the flip
side if TVL is declining while the token price holds steady or even rises it could be a red flag
that liquidity is leaving the protocol and this might point to reduced levels of trust or capital
moving to other projects as liquidity drops the token’s price is likely to follow suit in this
sense TVL is similar to the active addresses but focusing on the amount of money flowing into a
protocol rather than the amount of active users it serves as a key indicator of the overall
health and popularity of that protocol typically a consistently high TVL suggests that the protocol
is robust and stable and this can in turn create a positive feedback loop as new users are attracted
to the protocol driving up the TVL which attracts more users and so on and so on but it’s not
always that straightforward a TVL can sometimes be artificially inflated by whales trying
to draw attention to their platform and this manipulation can and often does mislead investors
into overestimating the security or popularity of that project so you should always cross-check TVL
growth with the number of active wallets to verify its legitimacy the third onchain indicator you
need to have on your radar is stable coin supply now like TVL stable coin supply is a crucial
metric for understanding liquidity dynamics within a crypto ecosystem and you can easily track it
on platforms like DeFi Lama investors value this indicator because it provides the clearest view of
how much liquidity is flowing into an ecosystem in fact stable coin supply shares some similarities
with active addresses in that it helps you spot divergences between a crypto project’s
fundamentals and its token price action more importantly analyzing stable coin supply helps
you determine how much of a platform’s TVL comes from D5 borrowing uh since most borrowing in DeFi
is done with stable coins and when stable coin supply rises it often signals increased capital
injection into D5 protocols boosting liquidity and potentially driving prices higher and by the way
uh we recently did do a video on DeFi borrowing coin supply ratio which is the ratio between a
cryptocurrency supply and the supply of stable coins in a nutshell this provides insight into
short-term buying power a low stable coin supply ratio means that there’s a lot of stable coin
liquidity sitting on the sidelines ready to be deployed into the market and this suggests high
buying power for stable coins potentially fueling a crypto rally especially if that liquidity flows
into the crypto project that you’re watching conversely a high stable coin supply ratio means
most stable coins are already in use leaving less liquidity available and this suggests a weaker
buying power and less potential capital flowing into the markets making a sustained rally less
likely and something else worth keeping an eye on is when Wales move stable coins around or when
stable coin issuers like Tether or Circle mint large amounts of stable coins and that’s because
large-scale minting happens when investors deposit large amounts of capital into the crypto market
and this foreshadows a sharp increase in trading activity thankfully you can easily keep tabs on
this by following Whale Alerts on Twitter or X now okay the fourth onchain indicator that you need to
be watching is exchange balances and this metric tracks the total amount of a specific crypto
that is held by exchanges and can be accessed on platforms like glass node although access in
this requires a tier 2 membership which is a bit pricey for crypto traders managing large amounts
of crypto though the insights gained could justify the cost now crypto held by exchanges typically
falls into two categories funds stored in hot wallets and those kept in cold storage hot wallets
are online and accessible via the internet making their funds accessible to anyone with access to
the wallet’s address cold storage on the other hand involves storing crypto on offline hardware
or paper wallets keeping funds inaccessible except when the exchange uses them for transactions
and this is important because when we look at crypto exchange balances we typically consider the
funds being kept in hot storage and that’s simply because these are the assets actively moving and
impacting the market the size of these balances will largely depend on how much trading activity
is happening on that crypto exchange generally speaking the higher the liquidity on crypto
exchanges the more active the market is and vice versa the reason this is important is because
when exchange balances are lower this means that there’s less liquidity on these exchanges which
results in crypto prices being more volatile usually this volatility is to the upside since
less exchange balances mean that more investors are hodling which implies more investors are
bullish on the flip side when exchange balances are high this is a bearish signal because it
indicates that investors are sending crypto to exchanges presumably to sell at least in
theory in practice there are other reasons why investors could be sending large amounts of crypto
to exchanges for instance they could be looking to trade on the derivatives market so thereby taking
advantage of the market volatility or they could be looking to utilize any staking mechanisms
available on the exchange to earn a yield or they’re looking to participate in an airdrop
campaign meanwhile heavy outflows from exchanges indicate that investors are hodling which is a
bullish signal now there is another thing you need to consider when you see whales sending large
amounts of crypto to an exchange you see in the past this often signaled an impending sell-off
however whales have grown savvy to the market reactions and now they use this visibility
to their advantage so rather than selling immediately an action that could trigger a panic
selling and drive prices down whales will often wait they will let the market react observing the
initial sell-off and wait for the subsequent dip buying they will then begin to gradually sell
during the pump allowing them to capitalize on the positive price action without disrupting
it maximizing their profits in the process okay the fifth onchain indicator that should be
on your radar is the percentage of holders in profit and this one is pretty straightforward and
can be tracked on websites such as CryptoQu for example as the name would suggest this metric
is a way to measure the amount of crypto folk sitting on gains at current prices and this
is arguably one of the most important things to consider during your onchain analysis because
when nearly everyone’s making money it’s only a matter of time before they cash in on those gains
so if you identify this trend happening then the market could be overvalued and it may be a good
time to sell and of course if it’s the other way around and most investors are sitting on a loss
the market is probably undervalued and it may be a good time to buy there are other metrics that
you should also take into account when analyzing how many investors are in the green for instance
there’s the net unrealized profit to loss more commonly known as the nupole and you can think
of the nupal as a way to check the temperature of the market basically the nupal indicator
shows us the difference between how much an investor’s crypto is currently worth versus how
much they paid for it when the nupal indicator starts to get high then this can often indicate
that prices have become overheated and it may be a good idea to sell conversely if null is low
then the market is just getting warmed up and it may be a good time to buy tracking how many
investors are currently in profit is a smart way to avoid emotional trading for example when you
see endless green candles and all your technical indicators signal buy it’s easy to get caught
up in the FOMO but if nearly every holder is in profit that’s a sign that the rally won’t last
and you could avoid becoming exit liquidity so then now that you understand the five key onchain
indicators the question now is how can you use onchain analysis more effectively well as you’ve
probably guessed the answer lies in combining it with the other two forms of analysis technical
and fundamental if you’re unfamiliar technical analysis involves studying cryptocurrency’s price
history to identify patterns and trends aiming to predict future price movements fundamental
analysis on the other hand dives into a project’s um fundamentals to determine its intrinsic value
and this means examining the team behind it the technology tokconomics use cases and so on and
so on individually these three types of analysis technical fundamental and onchain are powerful
tools however each only reveals a part of the bigger picture to truly succeed in the crypto
space mastering all three is essential for making well-rounded informed decisions fortunately we
have detailed guides on each of these analysis tool for assessing a project’s potential but what
if I told you that onchain analysis can also help you uncover additional investment opportunities
you might otherwise have overlooked take active wallets as an example an increase in the active
wallets is typically a bullish sign for a crypto project or protocol but what protocol is driving
that activity investigating this onchain can reveal whether the token associated with the
project fueling that growth is positioned to rally as activity ramps up as for a platform’s
TVL it’s obviously great to see a project with lots of funds locked on chain but you can also
look at bridged TVL which basically tracks the amount of native liquidity that’s being uh bridged
between one or two ecosystems whichever crypto is receiving this bridged liquidity could see a
spike in activity and the price of its token could rally as a result it’s a similar idea with
stable coin supply if the supply of stable coins is spiking then this usually is for a good reason
and identifying the cause of this could foreshadow an announcement of some kind an announcement
that your portfolio was prepared for because you followed the onchain clues and this approach
also extends to exchange balances a significant amount of crypto sitting on an exchange could
foreshadow a major move however it’s important to remember that holdings in ETFs can affect how
these balances appear so context is key as for the percentage of holders in profit this can be a
great way to identify which cryptos you can invest in before it starts to pump and that’s because
these profitable investors will likely rotate these gains elsewhere uh for example BTC holders
would likely rotate into ETH as you can see onchain analysis is a powerful yet underutilized
tool if you want to stay ahead of the game integrating these indicators into your investment
strategy is a simple yet effective way to gain an edge now once you have that edge you are going to
want to know where Bitcoin is heading and you can find out by watching our video right over here
and if you’re not subscribed to the channel yet you can do that right over here that’s me Nick
signing off thank you guys very much for watching
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