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Analyzing Market Behavior Through On-Chain Analysis

Want to understand the direction of the crypto market movement? One of the most powerful approaches is on-chain analysis — a method of reading investor behavior through transparent data recorded directly on the blockchain.

Here are 4 key foundations of on-chain analysis that you must know:

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1. Exchange Flow: Where Do Assets Flow?

Monitor the flow of crypto in and out of exchanges. When many assets are sent to exchanges, there may be a potential for large-scale selling. Conversely, if assets are withdrawn, that’s a bullish signal — indicating that investors prefer to keep their assets in self-custody.

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2. Whale Movement: Traces of Big Players

Giant wallets, or whales, have a significant impact on the market. With on-chain tools, we can track wallets with large balances. If they are quietly accumulating without significantly moving the price, it could be a strong sign that a bullish trend is being prepared.

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3. HODLer Activity: Loyalty Indicator

Use indicators like Coin Days Destroyed, Dormancy, or Wallet Age to monitor the movement of long-dormant coins. If “old” coins start changing hands, it could be an important signal regarding long-term sentiment in the market.

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4. Network Activity: Growing or Sluggish?

A spike in the number of new addresses and increased network activity reflects organically rising interest. Conversely, if network activity stagnates amid rising prices, it could be that the increase is just a temporary hype without fundamental support.

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🚀 Utilize insights from on-chain data to make sharper investment decisions. Because in the crypto world, data is a weapon!