5 useful on-chain metrics worth paying attention to: How to make better investment decisions?
5 important on-chain metrics for better investment decisions.
Although on-chain analysis cannot fully capture all possible events, it can help us understand market sentiment, as well as on-chain deposits and withdrawals, and profits. Cryptocurrency researcher Francesco has conducted an in-depth exploration of 5 practical on-chain indicators, including Fear and Greed Index, unrealized net profit/loss, and more.
1) Fear and Greed Index (F&G): Extreme fear may indicate that investors are overly worried, which could be a buying opportunity. When investors become too greedy, it means that the market will undergo a correction. The operability of the F&G index is still debatable. Currently, the cryptocurrency market is driven by macroeconomic uncertainty, which is reflected in the neutral F&G index. It is not yet time to be bullish, and investors may be waiting for some macroeconomic events to change the market sentiment; 2) Colin Talks Crypto Bitcoin Bull Run Index (CBBI): The index consists of 9 indicators, mainly to help us understand which phase we are in the Bitcoin bull run and bear market cycle. As of now, the index is 26; 3) Net Unrealized Profit/Loss (NUPL): This index shows the ratio of market value (Bitcoin market capitalization) and realized value (Bitcoin investor profit situation). If the market value rises faster than the realized value, the market will be overheated, and if the opposite is true, it is a good time to buy again; 4) Puell Multiple: This indicator mainly focuses on miner activity. When it is green, it indicates that the daily value of Bitcoin issued is at a historical low point, which is a buying signal. If it is red, it means that the daily issuance value is very high, and Bitcoin investors may profit; 5) Total supply of Bitcoin Short-Term Holders (STH) and Long-Term Holders (LTH): This indicator is only provided in the advanced version of Glassnode. Since Bitcoin reached its historical highest price in the fall of 2021, LTH has been steadily increasing, while STH has been declining since the summer of 2021.