#OnChainInsights The Importance of On-Chain Data Analysis in Evaluating Cryptocurrencies

With the complexity of the cryptocurrency market, On-Chain Analysis has become one of the important tools that investors rely on to understand market movements and make informed investment decisions.

This analysis relies on studying data recorded on the blockchain network, such as transaction volume, number of active addresses, and distribution of holdings between wallets, which helps identify behavioral patterns of investors. For example, when an increase in the number of new addresses holding a particular currency is observed, this may indicate a growing interest in the market, which may lead to higher prices.

One of the most prominent indicators used in this field is the Market Value to Realized Value (MVRV) ratio, which helps determine whether a currency is overvalued or undervalued. In addition, the movements of major wallets (whales) can be monitored to see if they are buying or selling, which may provide strong signals about the upcoming market direction.