On-Chain Analysis for Beginners: What Blockchain Data Reveals
On-chain analysis reads blockchain data to understand market behaviour. Here is how to use free on-chain tools to make better crypto investment decisions.
On-chain analysis reads the raw data of blockchain transactions to understand who is buying, who is selling, how much is on exchanges, and whether the market is overbought or oversold. Unlike price-only technical analysis, on-chain data provides insight into actual market participant behaviour.
Key On-Chain Metrics
- Exchange inflows/outflows: coins moving to exchanges signal selling intent; outflows signal accumulation
- HODL waves: what % of Bitcoin supply has not moved in 1+ years — high % = long-term holders confident
- MVRV ratio: market value to realised value — above 3.5 historically signals overvaluation; below 1 = undervaluation
- SOPR: Spent Output Profit Ratio — above 1 means holders are selling at profit; below 1 means selling at loss
- Miner activity: miner outflows to exchanges precede selling; miner capitulation often marks cycle bottoms
Free On-Chain Tools
- Glassnode (free tier): key on-chain metrics for BTC and ETH
- CryptoQuant: exchange flows, futures data, miner activity
- Lookintobitcoin.com: BTC-specific cycle indicators in clean visual format
- Etherscan: real-time Ethereum transaction data, wallet tracking
- Dune Analytics: custom queries on any DeFi protocol data — advanced but powerful
A Simple On-Chain Strategy
For most investors, two on-chain metrics are sufficient: MVRV (buy when below 1, caution above 3.5) and exchange supply (buy when supply falling steadily, caution when rising sharply). Steyble's analytics dashboard integrates key on-chain indicators alongside your portfolio view, making this data accessible without switching between multiple research tools.