Crypto markets are undoubtedly unique.
But one way it’s recently caught our attention is that we can see flows of capital BEFORE they show up in price. These are called on-chain metrics.
The blockchain is a public ledger.
We can see how many users are transacting on the network, how old these addresses are, how many coins they have, the profit and losses of these transactions, and the flows into exchanges before they hit the market.
If you’re not incorporating these metrics into your analysis, we think you’re missing out.
Markets operate under the constant influence of greed and pessimism. This is especially true in Crypto where we don’t have CEO’s, earnings, or arbitrary discounted cash flow models.
It’s pure supply, demand, and human emotion at work.
We can apply our technical tools to these markets because that same human element often has a funny way of repeating.
These last few months are just a testament to this entire school of thought…
When bitcoin undercut its lows and we subsequently flipped the book long, we saw massive spikes in the realized losses of traders.