The generality of blockchains constantly generates an endless flow of data, as each transaction and address leaves a clear path. This information, known as the data in the series, allows you to accurately analyze the activity of the cryptocurrency network.
Some industry indicators, such as the number of active addresses, the HODL wave and fragmentation rate, have become known in the industry, but the general public is only scratching the surface.
As the number of metrics available in the chain has grown to a tremendous amount, it has also become a challenge to see which is most beneficial to the average investor. A good place to start is the average stock market deposits, sent bitcoin addresses and stock miners’ indices.
Average exchange deposits
When analyzing flow and exchange flow, confusion usually occurs. Buyers do not have to withdraw funds after purchasing a cryptocurrency, and the same can be said about infringement, as funds can remain inactive for a long time before trading occurs.
The best way to measure this flow is to measure the average magnitude of occurrence. As shown in the above chart, each large deposit size corresponds to the local Bitcoin price low. This movement may be the result of massive surrender and reduced losses.
Such an indicator is of particular importance during the long-term descending trend. As mentioned earlier, indicators in the series should not be fully analyzed in isolation. Surrender can only take place after a few months, when the price cannot show strength.
Bitcoin addresses were sent from
Instead of measuring the active number of addresses, it provides an average of 7 days for the indicator sent from a clearer picture of network activity. This drastically reduces noise levels during money exchange and dual billing in mixing services.
Please note that each major peak in the daily average of sent addresses corresponds to the short-term local peak of the bitcoin price. These sudden rises in the currencies that move the currencies to the short-term discomfort, although this does not necessarily indicate a change in market trends.
Again, this indicator should not be interpreted without knowing market trends. Such an event occurred during the rally from April to July 2019, when the scale increased twice, indicating a period of decline, although prices continued to rise after several weeks.
Miners on the stock exchanges
Glass Node provides another detailed overview of transfers to bitcoin miners for stock exchanges. On average, up to 18% of the oil produced per day was produced up to 1,800 bitcoins per day, and this number has now been reduced to 900.
Although exchanges are not necessarily the only way to offload miners’ locations, this is the best indicator for measuring short-term price expectations.
In the 7-day above moving average chart, it can be seen that such a flow has dropped sharply by half of Bitcoin, and the index has remained at its lowest level in 12 months.
Meanwhile, Bitcoin remained relatively stable at $ 9,800, failing to exceed $ 10,000. The decline in conversion to stock markets can be interpreted as a somewhat bearish indication.
This accumulated position of miners who refuse to sell could be a possible catalyst for a more significant downturn if Bitcoin’s price cannot sustain higher levels. Unlike futures contracts, when sellers end short as the market grows, this effect will not happen, as the amount of BTC owned by miners will increase.
Chain data helps facilitate investor bias
String analysis is not an exact science, because nature’s trade is a human activity, at least for the time being.
In the face of contradictory signals, investors tend to rationalize and exclude those who do not match their ideas and desires.
As we mentioned earlier, there is a lot of noise on the market, but analyzing data in a series can help investors separate the signal from all of the distracting noise.