One of the most underappreciated elements about Bitcoin is the transparency of transactions. This enables us to gain deep insights into the behavior of investors and users of the network.
The growing industry of on-chain analysis looks to address the concerns of those who wish to categorize, cluster, and ultimately analyze entity behavior to find increasingly reliable and actionable signals.
Blockchain mechanisms mean analysts and traders have access to a wide array of data that isn’t possible to replicate in traditional asset classes, like stocks, commodities, and bonds.
One of the key metrics we’ve found to be of tremendous value is quantifying investor supply and demand through the use of supply shock.
In today’s note, we’ll outline how we use this data to supplement our traditional price work and technical analysis.