IS KNOWING ONCHAIN ANALYSIS IMPORTANT FOR A CRYPTO INVESTOR?

Some Crypto traders don’t know what onchain analysis is and why it is important, ride with me to know more.

Every activity on a public blockchain is open and anyone can keep track of the market, and verify transactions by extracting data from various network nodes, all these activities are carried out onchain.

Onchain Analysis according to Coindesk refers to the method of using information from a blockchain to determine market sentiment, when you can get insights into the market, you can make better buying and investment decisions.

There are different types of Blockchains where one can carry out onchain analysis such as Avalanche, Ethereum, Polygon, BNB, FTM etc

Why is Onchain analysis important? Every seasonal investor knows that onchain analysis helps them track fundamentals, utilities and transaction ability of any cryptocurrency and blockchain data and this way they see potential market opportunities, make profits and reduce their chances of losing money.

Onchain analysis also helps you know a project with a truly great community, these days we have a lot of chat engagers, and onchain analysis helps show you how many committed holders a project has.

Onchain Analysis Tools.
To make good onchain analysis you need to be able to read blockchain scanners. Blockchain Scanners are websites or applications that allow you to know what transaction has been carried out on a chain. Some of them are

DEXSCREENER: This website is not just for Defi Degen players. It is a powerful price analytics platform with data streams updating quickly as 5 minutes, it supports any blockchain.

NANSEN: Popularly known by blockchain analytics, it has real-time dashboards and alerts that can give users a better understanding of data in the crypto market. It supports the Avalanche, ETH, Polygon, and BNB chain and the site is being paid for.

DUNE ANALYTICS: this is an essential blockchain analytics tool for querying Ethereum data using simple SQL queries from premade databases. Ultimately Dune offers all the tools to query, extract and display massive volumes of blockchain data.

ETHERSCAN: With the name, we already know that Etherscan is a blockchain explorer and analytics tool for the Ethereum blockchain. It also helps in spotting early trends like airdrops on the Ethereum blockchain even gas fees.

We also have Messari, Into the block, Glassnode, Defilama etc

WHAT TO LOOK OUT FOR WHEN MAKING AN ONCHAIN ANALYSIS.
Transaction Volume
Price Correlation
Holders Addresses
Liquidity
Exchange inflow and outflow
Market cap
Block details etc

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