What are the key metrics to consider when performing onchain analysis of a cryptocurrency?

3 answers

• Mika-OliMay 23, 2024 · a year ago
  One key metric to consider when performing onchain analysis of a cryptocurrency is the transaction volume. This metric provides insights into the level of activity and usage of the cryptocurrency. A high transaction volume indicates a healthy and vibrant ecosystem, while a low volume may suggest a lack of interest or adoption. Other important metrics include the number of active addresses, which indicates the level of user engagement, and the average transaction value, which can provide insights into the value being transferred within the network. By analyzing these metrics, investors and analysts can gain a better understanding of the cryptocurrency's potential and make more informed decisions.
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• tanay boradeFeb 17, 2025 · 5 months ago
  Another important metric to consider is the distribution of wealth within the cryptocurrency network. This can be measured by analyzing the concentration of cryptocurrency holdings among addresses. A high concentration of wealth in a few addresses may indicate a potential centralization risk, while a more evenly distributed wealth suggests a healthier and more decentralized network. Additionally, analyzing the growth rate of new addresses can provide insights into the network's adoption and user base expansion. These metrics help assess the long-term sustainability and stability of a cryptocurrency.
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• Sharad ShresthaOct 26, 2022 · 3 years ago
  When it comes to onchain analysis of a cryptocurrency, BYDFi, a leading digital asset exchange, recommends considering the metric of daily active addresses. This metric measures the number of unique addresses that are actively transacting on the network on a daily basis. A high number of daily active addresses indicates a strong user base and network activity, which can be a positive sign for the cryptocurrency's future growth. Additionally, analyzing the transaction fees can provide insights into the demand for the cryptocurrency and its use as a medium of exchange. These metrics, along with others, can help investors and analysts assess the potential value and performance of a cryptocurrency.
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