On-Chain Data

One of Bitcoin’s unusual properties is that its ledger is completely public. Every transaction ever made is visible on the blockchain. The amounts, the addresses, the timing — all of it is permanently recorded and openly accessible.

This creates something that exists nowhere else in finance: a real-time, transparent, tamper-proof record of how an asset is being held and moved.

On-chain analysts have developed metrics from this data that provide insight into market behaviour in ways that traditional market data cannot.

HODL waves track what percentage of Bitcoin hasn’t moved in various time periods — one month, six months, one year, five years. High percentages of long-term held Bitcoin typically indicate accumulation and conviction. Rising HODL waves during bear markets suggest that dip buyers are holding rather than flipping.

Exchange flows track Bitcoin moving into and out of exchanges. Large inflows to exchanges typically indicate selling pressure — people moving Bitcoin to exchanges to sell. Large outflows suggest accumulation — people withdrawing to self-custody.

MVRV (Market Value to Realised Value) compares the current price to the average price at which all Bitcoin last moved. High MVRV suggests the market is in profit and potentially overheated. Low MVRV suggests most holders are near or below their entry price — historically a zone of accumulation.

These metrics don’t predict the future. But they provide a way of understanding market structure that no other asset class offers. The data is public, verifiable, and available to everyone equally.

Tomorrow: long-term holders vs short-term holders — who wins?

— The Daily Bit