#OnChainInsights

What is onchain analysis and how to use it as a crypto trader?

Onchain analysis is the examination of blockchain data to understand transaction patterns, asset movements, and the state of the network.

It provides a unique insight into market movements, absent in traditional finance, offering participants a different approach to research and due diligence.

Onchain analysis can be a new framework for cryptocurrency valuation that allows users to establish an edge.

Understanding onchain analysis

Onchain analysis, also known as blockchain analysis, involves examining blockchain data, such as transactions and wallet address holdings, to understand the actions of market participants on the respective blockchains in real-time. This unique insight into market movements, absent in traditional finance, provides participants with a different approach to research and due diligence.

Public blockchains like Ethereum, Solana, and Bitcoin are transparent digital ledgers, auditable by anyone. Every transaction and event on these chains is visible and publicly accessible, allowing anyone, anywhere, and at any time, to access and analyze them.

This transparency marks the beginning of a different paradigm in trading. It enables real-time monitoring of transactions, providing a deep understanding of market activities. Consequently, users who effectively utilize onchain analytics can make more informed decisions and identify opportunities in advance.