How analysts turn public ledger data into cost-basis, holder and flow signals — and where that reasoning breaks down.
Every Bitcoin transaction is recorded in public. On-chain analysis is the practice of turning that record into numbers people can study — with clear rules about what the numbers can and cannot prove.
Market price tells you what the last trade was. Realized price estimates what the coins in circulation cost when they last moved. Here is how it is built, worked through with numbers.
Analysts sort Bitcoin’s supply into coins that move often and coins that sit still. The dividing line is a statistical choice — here is where it comes from and how far you can trust it.
Exchange flow charts track coins arriving at and leaving wallets that analysts believe belong to exchanges. The arithmetic is simple; knowing which wallets are exchanges is the hard part.
Bitcoin tracks coins like banknotes; Ethereum tracks balances like a bank account. The choice decides what analysts can measure — especially how old coins are.
Blockchain data is exact about movements and silent about people, motives and anything that happens off the chain. Knowing the blind spots is what separates careful analysis from chart-reading.
Market cap prices every coin at today’s price. Realized cap prices each coin at the moment it last changed hands on-chain — which turns it into a rough record of what the market collectively paid.
Realized price turns realized cap into a per-coin number you can put on a price chart. It is an average of on-chain purchase prices — useful, but only as good as the assumptions behind it.
MVRV divides what the market says a coin’s supply is worth today by what that supply was worth when it last moved. Above 1, the average coin sits on a paper gain; below 1, on a paper loss.
NVT asks how much the market values a network for each dollar it moves on-chain in a day. It was pitched as crypto’s version of a price-to-earnings ratio — with the same kind of caveats, and a few new ones.
NUPL asks a simple question: if every coin were sold at today’s price, would holders as a group be up or down, and by how much relative to the market’s size?
SOPR looks only at coins that actually moved in a period and compares what they were worth when spent with what they were worth when created. It reads realized results, not paper ones.
This metric counts coins, not dollars. It tells you what share of the supply would show a gain if sold at today’s price — and nothing about how big that gain is.
HODL waves stack Bitcoin’s supply into coloured bands by how long ago each coin last moved. The bands swell and shrink as holders sit still or spend, and the result looks like waves.
Coin Days Destroyed multiplies each spent coin by how long it had been sitting still. A small transfer of very old coins can outweigh a flood of fresh ones — which is exactly the point.
Blocks, transactions, keys and fees: the moving parts every other topic builds on.
Supply schedule, mining, difficulty, Lightning and spot ETFs.
Accounts, gas, staking, the fee burn and layer-2 rollups.
Stablecoins, exchanges without order books, liquidity pools and on-chain lending.
Spot versus derivatives, funding rates, open interest, liquidations and order books.
Risk, volatility, diversification, position sizing and market cycles for crypto beginners.
Custody choices, seed phrases, hardware wallets and the scams that target new users.
Every transaction on a public blockchain is recorded where anyone can read it. On-chain analysis is the practice of turning that record into numbers: an estimate of what holders paid, how long coins have sat still, how much is moving to and from exchanges. The data is exact about movements, but it says nothing directly about who owns an address or why coins moved, so every metric rests on assumptions. This section explains how the main measures are built and, just as carefully, what they cannot tell you. Thresholds you see quoted for these metrics are conventions analysts use, not rules.
It helps to know how a Bitcoin transaction spends earlier outputs before you begin. Then read in this order:
Each guide leads into the metrics library, where indicators have their own profiles with formulas, origins and limits. Good places to begin are realized cap, the MVRV ratio, SOPR and exchange netflow. The UTXO and whale glossary entries define two terms that come up constantly.
No metric can tell you what the price will do next. Metrics describe what has already happened on the chain, under assumptions about which addresses belong to whom. The limits guide lists the blind spots, and crypto market cycles explains why none of this lets you time the market.
No. Each guide explains its metric in plain English and works through small examples with the arithmetic shown. Some background on blocks and transactions from Blockchain Basics makes the guides easier to follow.