# Introduction

CryptoQuant is a blockchain data & analytics firm bridging the gap between digital assets, blockchain technology, and traditional finance. Founded in 2018, CryptoQuant is one of the first **institutional-grade blockchain data firms** supplying reliable and timely on-chain and crypto market data directly from major blockchains and cryptocurrency exchanges. Our clients and partners include leading banks, prop traders, market makers, hedge funds, media outlets, and web3 foundations globally.

Our mission is to deliver **the industry’s most effective on-chain intelligence platform,** powered by our comprehensive and proprietary blockchain data solutions. We accomplish this by combining our robust infrastructure and data methodologies, high-performance analytics engine and a consultative approach to ensuring the success of our clients' applications and workflows.

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[How We Process Data](/what-is-cryptoquant/introduction/how-we-process-data)
{% endcontent-ref %}

{% content-ref url="/pages/0d86pEhAmecEUaqSIKDE" %}
[Why Trust CryptoQuant Metrics?](/what-is-cryptoquant/introduction/why-trust-cryptoquant-metrics)
{% endcontent-ref %}

{% content-ref url="/pages/isBTT5y584Zmfww2heXy" %}
[Why Market Driven?](/what-is-cryptoquant/introduction/why-market-driven)
{% endcontent-ref %}

<br>


# How We Process Data

## How We Process Data

<figure><img src="https://downloads.intercomcdn.com/i/o/759063131/aa6eae99cc3a115ae1e258d2/a139c109-5dd0-4afc-924f-95e8be9aedd5" alt=""><figcaption></figcaption></figure>

CryptoQuant collects raw data from both on-chain and off-chain sources including comprehensive data from 10+ blockchains, wallet labels, market data from exchanges, as well as log data from web2 companies entering the blockchain space.&#x20;

The collected raw data is then processed by decoding smart-contracts, identifying transactions, and creating structured data tables by web3 category. CryptoQuant develops pre-built metrics and indicators to value decentralized blockchain applications, track capital flows (including exchange and miner flows), analyze market and network activity, and metrics related to DeFi, NFTs, and GameFi, to name a few.&#x20;

Our solutions provide data at various levels of resolution and frequency, as well as via multiple delivery mechanisms, for custom and flexible analysis.


# Why Trust CryptoQuant Metrics?

## Why trust CryptoQuant metrics?

> We procure essential on-chain, market & futures data that provides critical insight into the fundamental investment activity underlying the network.

CryptoQuant data provides the most comprehensive on-chain and market data gathered from blockchain and major cryptocurrency exchanges. Over 1M traders worldwide are using our data, and more than 10,000 articles cite our data and analytics every month.

The blockchain can offer great potential, but also has its vulnerabilities. Among different datasets that can be observed, market data is increasingly being cultivated and manipulated as the digital assets market continues its growth trajectory. Thus, the importance of on-chain data has also increased as a result of it's immutable nature.&#x20;

CryptoQuant keeps track of every single transaction that occurs in the market, labels addresses through dusting and machine learning-based clustering, and identifies entities including exchanges, mining pools, funds and other key market participants.&#x20;

Outputs of our analysis can be broadly categorized into one of the following:&#x20;

1\) **Network Data** that relates to the blockchain network itself such as number of active addresses.

2\) **Market Data** that relates to prices evoked from major cryptocurrency exchanges.&#x20;

3\) **Entity Flow Data** that captures the movements, or flow of capital \[coins], amongst the most important players in the network such as exchanges and miners, as well as their reserves.

![](/files/qUdElR7BIDdvje5QK8cn)

Regarding CryptoQuant's entity flow data, our team currently tracks on-chain flow metrics for Bitcoin (BTC), Ethereum (ETH), stablecoins, and hundreds of other altcoins and tokens. Our proprietary wallet labelling methodologies allow us to keep updated records of exchange addresses, determine the supply held by/on exchanges and calculate on-chain flows—i.e., the transfer of native units—into or out of addresses associated with those exchanges. Measuring flows and supply held is an imperfect science, with algorithms constantly improving, but caution should be applied in their application in trading or other use-cases, particularly in the early periods of their release. (Note 1)

We provide real-time charts and raw entity data by following the below steps:

1. ***Data Collection***: We collect wallet addresses through seed address collection as well as basic, and advanced clustering, based on the properties of that specific blockchain.
2. ***Data Serving***: Once the data is collected, it is then stored in secure databases for low-latency data extraction, processing and endpoint delivery.
3. ***Data Validation***: Our quality assurance process (reserve analysis, trend analysis, graph analysis and statistical data analysis) ensures that we have valid labelled addresses.

Data provided by CryptoQuant is trusted, leveraged and integrated by leading institutions including CME, CoinDesk, Forbes and Bloomberg. In addition, our firm has also helped solve a number of money laundering cases in South Korea, and globally, by utilizing our address label data - closely working with Korean Police Agency and Prosecution Services. The South Korean government has supported us by spending one million USD to investigate wallets since 2019.

## Note on Data Latency

Please note that the end-of-day data of exchange, miner, inter-entity flows will be ready to serve from UTC 00:00 AM which can then take up to one hour to process. Since block confirmations take time due to the nature of the blockchain, blocks created before 00:00 AM are reflected in the calculation sequentially. Block confirmation times vary from time-to-time, so the safe time to query an endpoint for a full day would be an hour after that day. (i.e., UTC 1:00AM) Note that Top 10 data will return null until the block confirmation is complete. Search more at: CryptoQuant's [API docs Time convention](https://cryptoquant.com/docs#section/Time-Convention)

Combining blockchain data with our labelled addresses usually takes between 1 and 5 minutes to process. Therefore, to ensure you receive the latest data points, we recommend requesting the data after 5-10 minutes.&#x20;

## Technical Documents

For more information on our data and data processing methodology, please review the following documentation.

{% file src="/files/-Mb82ksR2Kw3c0njXU40" %}


# Why Market Driven?

CryptoQuant: Your Gateway to Next-Level Market Data

The market is time to time heavily influenced by the short temperament of the market participant. To handle and track market participants' sentiment, data that figures out their movements in the closest and fastest manner possible is required. On-chain data provides valuable macro market insight and information on activities that involve blockchain transactions and even covers exchange flows that analyze blockchain transactions that involve exchanges.

However, it has difficulty in exploring what kind of trades are occurring inside the exchange. Thus, to have a complete and broader view of the market as a whole, data that covers activities inside of exchanges, so-called ‘market data' is needed.

Also, as institutional investors are entering the cryptocurrency market and more retail investors are joining the market, the idea of a futures market that deals with more quantities of funds and serves as risk management is beginning to play a bigger role in the market.

Acknowledging this importance, the company CryptoQuant provides market data and indicators to help investors figure out traders' sentiment.

## Why CryptoQuant as a Data Provider?

### 1) Exclusive market data combined with on-chain

Rather than providing basic market data that could be acquired by freely provided exchanges' account information, CryptoQuant utilizes its on-chain expertise of labeling wallets and on-chain data by combining them with basic market data to draw additional values.

Some indicators or data such as ‘Estimated Leverage Ratio' can't be easily drawn from freely provided market data and only be derived by commercial data providers who have access to accurate on-chain accumulative data.

CryptoQuant provides users with exclusive market data that are combined with on-chain data to help investors go one step further in gaining market insight.

### 2) Detailed and Precise Market Data

CryptoQuant provides more detailed market data through two methods.

<figure><img src="/files/oQgczseJGoMvwx5lxm9o" alt="CryptoQuant&#x27;s Detailed Market Data Analysis"><figcaption><p>CryptoQuant's broad exchange coverage</p></figcaption></figure>

First, CryptoQuant covers a **greater number of exchanges** than other data providers.

More coverage on exchanges means that CryptoQuant's market data is the closest meaning to the true market data.

Second, CryptoQuant provides some market data by a **minute window and volume-weighted average price (VWAP)** to produce instant and comprehensive market data.

Market sentiment could be changed in a short period of time especially in the futures market. In order to respond to such changes, data that covers in a minute window is critical to investors to take their profits or protect their wealth. Also, the simple mean of total exchanges' market data has difficulty in accessing the true market and distorts the true means making VWAP data more valuable.

### Real-Time Market Monitoring

CryptoQuant's real-time market monitoring capabilities empower market-driven decisions by providing minute-by-minute insights into cryptocurrency markets. This feature ensures that companies and investors can swiftly adapt their strategies to ever-changing market sentiments, minimizing risks and maximizing opportunities. By leveraging cutting-edge technology, CryptoQuant delivers timely data that is crucial for customer success in dynamic industries where real-time responsiveness is key.

### Comprehensive Exchange Coverage

<figure><img src="https://images.surferseo.art/53b054b8-5746-467e-9246-8fd126aecaad.png" alt="Market Driven–Bitcoin: Exchange Inflow (Total) - All Exchanges"><figcaption></figcaption></figure>

In the crypto space, comprehensive exchange coverage is imperative for accurate market research and data-driven decision-making. CryptoQuant stands out by offering an extensive network that spans various exchanges, providing businesses and investors with the resources and a holistic view of markets. This comprehensive coverage enables companies to make informed decisions based on a broader understanding of market movements, catering to the diverse needs of customers engaged in a variety of industries.

### Unique Indicators for Informed Decision-Making

CryptoQuant's commitment to providing unique indicators, such as the 'Estimated Leverage Ratio,' sets it apart from competitors in the world of market data providers. These distinctive indicators offer a nuanced perspective that goes beyond the basic market research commonly available. By offering insights not easily accessible elsewhere, CryptoQuant empowers customers to make informed decisions, ensuring their businesses stay ahead in highly competitive markets driven by technology and innovation.

### Risk Management in the Cryptocurrency Market

As institutional investors increasingly enter the cryptocurrency market, effective risk management becomes paramount. CryptoQuant's sophisticated data and risk assessment tools serve as a crucial component in companies' risk management strategies. By analyzing market-driven data, businesses can mitigate potential financial losses and safeguard customer accounts, contributing to a secure organization and stable environment within the volatile cryptocurrency markets.

### Responding to Market Changes

In the fast-paced cryptocurrency markets, the ability to respond promptly to market changes is vital for business success. CryptoQuant's minute-by-minute data not only provides real-time market insights but also equips customers with the agility needed to adapt strategies in response to sudden shifts in market sentiment. By leveraging this technology, companies can ensure they stay resilient, relevant and responsive to the ever-evolving demands of their customers and industries.

### Catering to Institutional Investors and our API

Recognizing the growing involvement of institutional investors, CryptoQuant's API offerings cater to the sophisticated needs of businesses operating in the cryptocurrency space. The API facilitates seamless integration of CryptoQuant's market data into institutional platforms, empowering companies to tailor their services to meet the unique requirements of institutional customers. This strategic approach enhances the company's ability to cater effectively to a diverse customer base and solidifies its position as a preferred market data provider in the rapidly evolving landscape of cryptocurrency and blockchain technologies.

### Final Notes

In conclusion, CryptoQuant's powerful combination of real-time insights, extensive exchange coverage, and unique indicators creates a significant difference in the cryptocurrency market. The platform excels in risk management and effortlessly adapts to market changes, providing a valuable resource for businesses and investors.

Our tailored solutions for institutional investors through the API exemplify the platform's commitment to meeting diverse customer needs. As the cryptocurrency landscape evolves, CryptoQuant remains a reliable partner, delivering precise data and cutting-edge technology for informed decision-making. The article explores the depth and calculated performance of CryptoQuant's offerings, disrupting traditional market data approaches. With a mix of innovation, quality and responsiveness, CryptoQuant ranks high in delivering timely, impactful information that sets a new standard in the ever-changing world of digital assets.<br>


# Background Knowledge

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[What is On-Chain Data?](/what-is-cryptoquant/background-knowledge/what-is-on-chain-data)
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[What are Entities?](/what-is-cryptoquant/background-knowledge/why-entity-matters)
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[What is a UTxO?](/what-is-cryptoquant/background-knowledge/what-is-a-utxo)
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# What is On-Chain Data?

On-chain data shows network activity, via transactions, recorded on the blockchain ledger

## Being "On-Chained" Provides a Bird's View of the Blockchain

On-chain data comes from a public ledger system that allows people to look into all transactions that are recorded on to it. Utilizing this transparency, various raw blockchain data containing information such as coins sent amount and time, wallet address, and fees that are being paid to a miner which show the details of the activities via transaction can be extracted from on-chain data. There is little room for hiding in the on-chain process and being "on-chained" lets you be the watcher of the bitcoin network.

Upon this raw information, if we put our resources into analyzing them, the on-chain analysis can be a new framework for bitcoin valuation which allows traders to establish an edge. With on-chain analysis, traders can see what happens in the networks that finally results in price movement. For example, exchange flows data gives us an insight into actual major players' money flow in the networks. [CryptoQuant](https://cryptoquant.com/) aims to provide full historical on-chain and market data which allows you to build an in-depth understanding of the markets, therefore, leading you to make robust trading strategies.

<figure><img src="/files/cH4vUYEuWCz24F5e72Zt" alt="Bitcoin Sell-Off"><figcaption></figcaption></figure>

<figure><img src="/files/al6hLc251PIwJ4KXdLwG" alt="Bitcoin Exchange Flows"><figcaption><p>Only CryptoQuant's on-chain data predicted the Black-swan situation. (Chart Link: <a href="https://cryptoquant.com/overview/btc-exchange-flows/104?window=day">cryptoquant.com/overview/btc-exchange-flows/104</a>)</p></figcaption></figure>

### CryptoQuant Visualizes Blockchain Activities: On Chain Analysis

#### CryptoQuant makes blockchain data "ready-to-use" with on-chain metrics

It is true that blockchain data is public for everyone to see but it is hard to interpret them. Everyone says that blockchain activities are open and decentralized but what good is there if we lack the ability to see them? It is not easy for all people to know what to look for in a single transaction data.

That's where CryptoQuant comes into play. CryptoQuant first collects all the data that comes from the transactions happening on the blockchain. When on-chain data gathering is done, defining them adds additional meaning. For example, CryptoQuant differentiates blockchain data that is only involved with exchanges' wallets and extracts second hand information such as the total amount deposited in the exchange or how much has flown into exchanges in a given time. This second-hand information makes a huge impact on trading by providing investors a valuable insight.

### On-chain indicators: How do we utilize on-chain data?

CryptoQuant Academy provides rich explanations of **meaningful indicators and exclusive metrics** in the following pages including interpretation, calculation method, and use cases. On-chain data is still in the early stage for an investment of cryptocurrencies. Our team hopes you join the world of on-chain data for proactive movement with unique indicators which in turn make chances for being profitable in cryptocurrency markets.

#### Market Data

```
Bitcoin/
   ├── Status/                // status of Bitcoin entity
   ├── Exchange-Flows/        // on-chain statistics of exchanges
   ├── Flow-Indicator/        // mpi, whale ratio and other flow indicators
   ├── Market-Indicator/      // stablecoin supply ratio and other market indicators
   ├── Network-Indicator/     // nvt, nvt-golden-cross and other network indicators
   ├── Miner-Flows/           // on-chain statistics of miners
   ├── Inter-Entity-Flows/    // on-chain statistics of flows between entities
   ├── Fund-Data/             // fund related data
   ├── Market-Data/           // price, capitalization
   └── Network-Data/          // general statistics of Bitcoin network

Ethereum/
   ├── Status/                // status of Ethereum entity
   ├── Exchange-Flows/        // on-chain statistics of exchanges
   ├── ETH2.0/                // Ethereum 2.0 statistics
   ├── Fund-Data/             // fund related data
   └── Market-Data/           // price, capitalization, market indicators

Stablecoin/
   ├── Status/                // status of stablecoin entity
   ├── Exchange-Flow/         // on-chain statistics of exchanges
   ├── Market-Data/           // price, capitalization, market indicators
   └── Network-Data/          // USDT, PAXOS, USDC, DAI, TUSD, SAI

ERC20/
   ├── Status/                // status of erc20 entity
   ├── Exchange-Flow/         // on-chain statistics of exchanges
   └── Market-Data/           // price
```

{% hint style="info" %}
Not all indicators or on-chain metrics are currently covered in CQ Dataguide. Our research team is working on the others to provide meaningful analysis tools. If you have data on-chain to be analyzed, please submit an idea form at [**Suggest Idea**](https://forms.gle/TAmmuHWtPaDHiHUx7).
{% endhint %}

### Market Sentiment

Market sentiment, deciphered through the work of on-chain analysis, is a linchpin in understanding the dynamics of cryptocurrency markets. On-chain analysis delves into the real-time transactions recorded on the blockchain, unraveling insights that extend beyond surface-level market trends. Realized value, a key metric in on-chain analysis, encapsulates the actual worth of a cryptocurrency based on the movements of its coins over time. This contrasts with market value or market capitalization, providing a nuanced perspective that reflects the true value of active coins rather than the entire supply. By examining on-chain data, analysts can discern shifts in market sentiment—whether it be the actualization of bullish or bearish trends. This process stands in stark contrast to off-chain data, offering a more granular and accurate portrayal of investor behavior. In a landscape where the pulse of the market is determined by intricate on-chain analysis, the ability to distinguish between realized value and market capitalization is paramount for crypto traders navigating the dynamic currents of the cryptocurrency space through market intelligence.

### Final Notes

In conclusion, the realm of on-chain data unveils a profound perspective on cryptocurrency markets, serving as a beacon for informed trading decisions. As highlighted by CryptoQuant's curated dashboards and meticulous chart analysis, on-chain metrics provide a bird's-eye view of blockchain activities, allowing traders to transcend the surface-level market trends. Realized value emerges as a key beacon in this landscape, delineating the true worth of cryptocurrencies based on actual coin movements, a departure from conventional market capitalization. The significance of on-chain data lies in its ability to decode the complexities of trading activity, offering insights into price movements and market dynamics that extend beyond mere speculation.

CryptoQuant's role in making blockchain data "ready-to-use" with on-chain metrics underscores the importance of interpreting these vast datasets. By distinguishing and defining various metrics, including second-hand information derived from exchanges, CryptoQuant empowers investors with valuable insights that can profoundly impact trading decisions. As on-chain analysis progresses, it becomes an evolving framework for cryptocurrency valuation, providing traders with a competitive edge in understanding and navigating the market.


# What are Entities?

The concept of entity is a key point in understanding on-chain data.

## Finding out who Owns Bitcoin is Crucial to the Investment

There are certainly price drivers in the market and market status can be affected depending on the status of such drivers in the market. For example, if a Bitcoin miner sends their BTC to the exchange market and sells them, it would drive the prices down considerably. Like the case of a miners' sell, it is obvious that if someone with a big bag sells, the price will likely drop. Thus, it is important to track and watch certain holders' behavior and find out who are the major price drivers in the market.

### The Magnitude and Different Interests of Major Players

<figure><img src="/files/j5QXq8dVBm4Fgg73HM8c" alt="Entity Crypto: Magnitude and Different Interests of Major Players"><figcaption><p>Main participants who determine the price</p></figcaption></figure>

Main participants who determine the price.

#### **Amount**

Retail selling bitcoin and business entities with a huge amount of coins selling their bags can't be interpreted at the same level because of its impact on price.

#### **Different Interests**

Each entity has a unique feature that they could give investors regarding interpreting the market structure or movement. It is essential for investors to understand what they are and be aware of what points investors should always pay attention to according to the entities. For example, as for miners, managing cost/revenue and reserve would be the priority while an investor company with a huge amount of digital assets focuses on keeping their reserve and trying to accumulate more assets.

Thus, from an investment perspective, major businesses and participants in blockchain can be classified into three types: **exchange, miner, and whale**.

## Entity Crypto Types

### Entity Type 1: **Exchange**

Exchange is where the actual trading events occur, which reflects the **demand** side.

The market price is formed as a result of trading activities, where the price is consensus in the market. The metrics based on exchange entities such as inflow or outflow can be a big sign of major trading activities which can be a risk handler for smart traders. We define an exchange in our metrics as all participants in the exchange including users (traders).

### Entity Type 2: M**iner**

Miner controls **supply** on the blockchain by mining blocks.

If mining pools shut down or limit their mining activities for some reason, the network cannot be maintained. As mining pools make profits as much as they can, normally there is a timing gap between mining and monetization. By observing their behaviors via metrics such as miner outflows, traders can find unique signals to make profits. We define a miner in our metrics as all participants in the mining pool including individual miners.

Miners are OG whales. They periodically send a certain amount of BTC to exchanges, but if they decided to sell more coins, their outflow is likely to be changed significantly.

### Entity Type 3: W**hale**

It makes and exploits **market inefficiency** by controlling both demand and supply.

A whale makes and exploits **market inefficiency** by controlling both demand and supply. Whales are traditionally important entities even in stock markets since they have the power to swing and move markets. Exploiting their patterns with CQ's metrics would be helpful to avoid risks.

To exploit market inefficiency caused by the entities as a trader, we need to see their behaviors. **Flow data** is [CryptoQuant](https://cryptoquant.com/)'s own form of unique data that summarizes their behaviors. Compared to network data, flow data is more granular (micro) data that can explain detailed activities that occurred on the blockchain. By understanding how the entities behave in the blockchain, we may build unique trading strategies against normal traders. We briefly describe each type of entity on why those types are important in the following sections.

{% embed url="<https://youtu.be/MscDBeUrgcA>" %}

### **Future Trends in Entity Analysis**

As the cryptocurrency landscape continues its rapid growth, the future of entity analysis presents exciting prospects. The integration of advanced technologies, such as AI and machine learning, is set to refine our strategies by providing deeper insights into entity behaviors. Privacy concerns and decentralization challenges may reshape the way entities operate, requiring adaptable strategies from market participants. Anticipating the rise of new entity types and understanding institutional influence are crucial for maintaining authority in cryptocurrency markets. Keeping a close eye on regulatory developments will be essential, as they impact how entities are interpreted and managed. As CryptoQuant's metrics evolve, offering enhanced access to valuable insights, users can navigate these changes, ensuring the continued value of their token holdings.

## **Final Notes**

In conclusion, mastering entity analysis is essential for cryptocurrency owners and traders. As the industry evolves, understanding the growth potential, adapting strategies, and managing authority become paramount. The written future of entity analysis will be shaped by advancements in technology, responses to privacy concerns, and the influence of institutional players. Accessing reliable metrics and staying informed on regulatory developments will empower users to interpret entity behaviors effectively. With CryptoQuant's evolving tools, users can operate within the dynamic cryptocurrency landscape, ensuring the sustained value and growth of their token holdings. Stay tuned to these trends for a prosperous journey in the evolving world of digital assets.


# What is a UTxO?

Unspent Transaction Output (UTxO) is a fundamental blockchain concept, representing received cryptocurrency in your wallet. It ensures transparency & security by tracking each unit's origin & status.

## UTxOs as Cash Equivalent

<figure><img src="https://images.surferseo.art/be101fd7-714d-4ec2-8539-e21bb3b79731.png" alt="Bitcoin: UTXO Count"><figcaption></figcaption></figure>

An Unspent Transaction Output (UTxO) represents a certain amount of bitcoin that has been authorized by a sender and is available to be spent by a recipient. Unlike account-based transactions where you can send exactly 5 BTC to another person's account, Bitcoin uses UTxOs which can be comparable to using physical cash.

Let's imagine that you have a Bitcoin balance of 10 BTC and have to pay 5 BTC for a purchase. In order to pay 5 BTC by sending a UTxO, you will need to pay over or the same amount as the price, similarly to cash.

For example, Think of your wallet as having different-sized compartments for your Bitcoin, each representing a specific Unspent Transaction Output (UTxO) from past transactions. Consider these compartments as follows:

Big Compartment (10 BTC UTxO)

Medium Compartment (5 BTC UTxO)

Small Compartment (4 BTC UTxO)

Tiny Compartment (3 BTC UTxO)

Now, when you need to make a Bitcoin transaction of 5 BTC, it's like choosing which UTxO compartments to use:

### Option 1: Overpay and Get Change

Use the Big Compartment (10 BTC UTxO) and get change (new UTxOs) of 5 BTC.

Combine the Medium and Small Compartments (9 BTC UTxO) and get change of 4 BTC.

Combine the Small and Tiny Compartments (7 BTC UTxO) and get change of 2 BTC.

### Option 2: Pay Exactly What's Needed

Pay with the Medium Compartment (5 BTC UTxO) exactly, with no change required.

This way, your Bitcoin address, or wallet operates like an organized set of UTxO compartments, offering flexibility in how you handle your Bitcoin transactions.

### **Note**

#### **Minimum Payment Requirement**

To ensure a smooth transaction, keep in mind that the payment should be a minimum of 5 BTC or more.

#### **Change in the Form of Independent Compartments**

The change you receive back operates like getting a new, independent compartment in the form of Unspent Transaction Output(s) (UTxO(s)).

#### **UTxO vs. Cash:**

Think of UTxO transactions like splitting cash into different pieces. Once a UTxO is created, it can't be divided further, similar to cash. Unlike cash, which has fixed denominations, UTxO(s) can represent any amount of BTC, akin to writing a flexible check.

#### **Fees for Recording Transactions:**

Remember, a crypto transaction output includes an associated transaction fee, paid to miners who secure and record a particular transaction on the blockchain.

Understanding these key points makes navigating Bitcoin transactions as easy as managing different-sized compartments in your wallet.

### UTxOs as Check Equivalent

#### UTxO **are created and destroyed**

When UTxOs are used in a previous transaction output to pay or transfer, it is no longer a formerly valid UTxO. Just like checks can be used only once, UTxO work the same way. When there is a UTxO transaction out from the wallet where they were stored, they are referred to as 'destroyed'.

Upon destruction of a UTxO, the creation of a UTxO usually takes place as transactions can result in the process of receiving change(s). To sum up, the creation and destruction of UTxOs take place when any UTxOs move out of a wallet in the transaction process.

Every UTXO is a one-time-use entity and must be spent in its entirety. Each output corresponds to a single transaction input, meaning one input can utilize only one output from a previous transaction.

#### Age of UTxO

<figure><img src="https://images.surferseo.art/238b2b30-420e-4e31-809e-f369a49d093a.png" alt="Bitcoin: UTXO Count - Age Bands"><figcaption></figcaption></figure>

After the creation of new UTxOs, UTxOs stay in the wallet dormant and the days it stays dormant are documented. This is possible due to the blockchain system of inscribing the timestamp of each transaction and the time of the block containing that transaction was written and recorded.

Thanks to the feature of a UTxO's age, various indicators and data have been created to draw additional insights into the activity of the underlying blockchain. There are many ways of using such ages, including:

1. Focusing on the 'alive' days of certain or all UTxOs
2. Focusing on the destroyed days of certain or all UTxOs
3. Comparing each price at the moment of creation and destruction of UTxO(s)

### **Why** UTxO **is important in Bitcoin and Crypto**

The Unspent Transaction Output (UTxO) model plays a critical role in crypto, offering a transparent and efficient way to handle transactions. Let's delve into the essential aspects that make UTxO indispensable.

**Ensuring Transaction Integrity:**

* When initiating a new transaction, UTxO acts as a guardian, verifying that coins are spent only once. This prevents fraudulent practices such as double-spending.

**Paving the Way for Future Transactions:**

* The cyclic nature of UTxO ensures that every spent coin becomes a UTxO for subsequent transactions, establishing a reliable foundation for the continuous flow of digital transactions.

**Transaction Fees and UTXO:**

* Transaction fees are inherently linked with UTxO. Each time a UTxO is spent, a nominal fee is levied, contributing to the incentives for miners that validate transactions.

**Simplifying Transaction Verification:**

* UTxO simplifies the verification process by providing a straightforward method for validating transactions. By inspecting existing UTxOs, the network efficiently ensures the legitimacy of transactions.

Understanding UTxO is akin to unraveling the architectural foundation of cryptocurrency transactions. It stands as a vital component, fostering security, trustworthiness, and seamless functionality in the digital currency landscape.

### **Bitcoin UTXO Set Simplified**

In Bitcoin, the Unspent Transaction Output (UTXO) set is like a snapshot of all available, unspent transaction outputs. Each Bitcoin node actively maintains this set, a crucial piece in the cryptocurrency puzzle.

Here's the breakdown:

1. **UTXO Set Composition:** The UTXO set encompasses all unspent outputs, constantly updated by each Bitcoin node. These outputs represent bitcoins that have not been used in subsequent transactions.
2. **Node Responsibilities:** Bitcoin nodes, specifically full nodes, keep a copy of the UTXO set to efficiently validate transactions. This way, they don't need to scan the entire blockchain for every transaction verification.
3. **Technical Nomenclature:** Technically, these sets are known as the "chainstate" and find their home in the chainstate data directory of each node. As new blocks are added to the blockchain, the chainstate updates, keeping track of spent and newly generated UTXOs.

In essence, every node in the network maintains an identical copy of the UTXO set in its local database.


# Our Product

## 1. CryptoQuant Metrics

> **Trusted data from on-chain data experts**

CryptoQuant's **pre-built metrics** contain on-chain metrics and indicators to enhance investors' decision-making processes. They are easy to interpret and are served in granular resolution and accuracy.

Pre-built metrics can also be **customized** in the [Pro Chart](https://cryptoquant.com/prochart) or [Analytics Query](https://cryptoquant.com/analytics/query) section of the CryptoQuant platform to fit your needs.&#x20;

CryptoQuant's metrics can be used for:

* Making investment and trading decisions
* Analyzing market status
* Fundamental analysis

{% hint style="info" %}
**Further Notice**

1. Find out more about CryptoQuant metrics [here](/what-is-cryptoquant/introduction/why-trust-cryptoquant-metrics)
2. You can find them in the [Chart](https://cryptoquant.com/asset/btc/chart/exchange-flows) menu.
   {% endhint %}

##

## 2. Web3 Analytics

> **Build custom metrics with a no-code query user experience**&#x20;

Web3 Analytics lets you **create your own metrics** with CryptoQuant's robust database in a no-code query environment.

Web3 Analytics can be used for:

* Adjusting existing pre-metrics, or creating new custom metrics and analytics, using the built-in formula builder
* Building asset valuation frameworks
* Conducting risk analysis
* Tracking blockchain, project or dapp KPIs
* Establishing product-market-fit for a crypto project
* Monitoring top holders and entities
* Multi-chain analysis

Native **SQL queries (BigQuery)** are also available for developers / tech-savvy users.

{% hint style="info" %}
**Further Notice**

1. Find out more about Web3 Analytics [here](/web3-analytics-tool/overview).
2. You can find public charts and queries in the [Analytics](https://cryptoquant.com/analytics/dashboard) menu.
   {% endhint %}

##

## 3. Data API

> **Flexible, real-time, institutional-grade data API**

CryptoQuant provides institutional-grade APIs for both pre-built metrics and custom metrics created using the Web3 Analytics tool.

Find out more about the pre-built API in our API Docs below, and contact our [sales team](https://docs.google.com/forms/d/e/1FAIpQLScm3zZV_REtaCOvqRn7gYoR7yEvDR5JrErejQ1FjQOtYmUqIg/viewform) for custom API.

{% embed url="<https://cryptoquant.com/docs>" %}

## 4. Insights

> **Explore actionable, on-chain insights**

Use on-chain data, analytics and insights within your crypto research and investment workflows with the help of CryptoQuant's **QuickTake**, **Research**, and **Alerts.**

{% hint style="info" %}

1. Find more information on community-driven Quicktake [here](/quickstart/6-minute-feature-guide/4.-quicktake).
2. To get CryptoQuant Research, contact our [sales team](https://docs.google.com/forms/d/e/1FAIpQLScm3zZV_REtaCOvqRn7gYoR7yEvDR5JrErejQ1FjQOtYmUqIg/viewform).
3. Get telegram alerts on whale movements [here](https://t.me/cryptoquant_alert), and summarized insights [here](https://t.me/cryptoquant_official).
   {% endhint %}


# 5 Minute Data Guide


# 3 Key On-Chain Metrics

## **How would you evaluate the crypto market?**

Why do we get nervous as soon as we buy a new cryptocurrency? Is it inevitable? We offer exclusive data and flexible tools which have been extensively used and tested by crypto hedge funds.

To begin with, learn 3 essential on-chain data that other traders leverage to predict future value. Take a look to see how it can help you reduce risk and build an edge.

### 1. All Miner’s Outflow

Prepare for price drops and corrections by monitoring all miner's outflows

<figure><img src="/files/qfuTN2a1BvJh2QOigKD9" alt=""><figcaption></figcaption></figure>

Mining pools play an important role in the bitcoin network as they are in charge of supplying new BTC from mining proceeds, but they can also trigger the price to drop when they send large amounts of BTC to exchanges at once. If you monitor all miner's outflow data, you can prepare for downside price risk. CryptoQuant offers all miners' data at block-level, from the genesis block to the most recent block.

{% embed url="<https://cryptoquant.com/asset/btc/chart/miner-flows/miner-outflow-total?chartStyle=column&ema=0&metricScale=linear&miner=all_miner&priceScale=log&sma=0&window=DAY>" %}

### 2. All Exchanges Reserve

Forecast long-term value, using available supply, with exchanges' reserve data

<figure><img src="/files/RRHA9j8j9QwBBiwa2SDc" alt=""><figcaption></figcaption></figure>

All exchanges reserve refers to the supply of cryptocurrencies. All exchanges reserve is an important indicator to determine the future value of cryptocurrencies, based on the supply within exchanges, and is being used as a precedent indicator of price changes.&#x20;

{% embed url="<https://cryptoquant.com/asset/btc/chart/exchange-flows/exchange-reserve?chartStyle=line&ema=0&exchange=all_exchange&metricScale=linear&priceScale=log&sma=0&window=DAY>" %}

{% embed url="<https://cryptoquant.com/asset/eth/chart/exchange-flows/exchange-reserve?chartStyle=line&ema=0&exchange=all_exchange&metricScale=linear&priceScale=log&sma=0&window=DAY>" %}

### 3. Supply Adjusted CDD

Enhance your strategy by observing long-term holders’ actions

<figure><img src="/files/SCyJIKpBWOzQyirHnhkm" alt=""><figcaption></figcaption></figure>

Coin Days evaluates the number of coins that are not being spent, which gives more weight to estimate long-term-holder(LTH) position. When that coin is spent, the coin is considered "destroyed," and is being updated in CryptoQuant's Coin Days Destroyed(CDD) metric. CDD is the sum of products of spent transaction output alive days and its value.

Upon CDD, Supply Adjusted Coin Days Destroyed (CDD) is calculated by adjusting CDD for total supply. It is calculated as the value of CDD divided by total supply. CDD is adjusted for better tracking of long-term holders.

{% embed url="<https://cryptoquant.com/asset/btc/chart/network-indicator/supply-adjusted-cdd?chartStyle=column&ema=7&metricScale=log&priceScale=linear&sma=0&utm_campaign=onchain_data&utm_content=onchain_overview&utm_medium=onboard&utm_source=notion&window=DAY>" %}

***

{% hint style="info" %}
**Further Notice**

1. Further information is available on [Miner Flow/Indicators](/cryptoquant-metrics/miner), [Exchange Flows/Indicators](/cryptoquant-metrics/exchange), and [UTXO Data/Indicators](/cryptoquant-metrics/utxo)
2. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
   {% endhint %}


# 3 Key Market Metrics

## How can you track market updates in the crypto market?

CryptoQuant consolidates all major crypto exchange data, including prices and volumes, and updates this core data in real-time. Learn 3 essential data from derivative exchanges, which are more sensitive to price changes, and the method to adapt them to your crypto investment strategy.

***

### 1. Long/Short Liquidation

Understand price volatility by using long/short liquidations

<figure><img src="/files/8JEL7Vg94oKSg7bLl0UD" alt=""><figcaption></figcaption></figure>

<figure><img src="/files/QCv9TEhb50hoVNfddf25" alt=""><figcaption></figcaption></figure>

Long/Short liquidations refers to the closing out of long and short positions, or contracts, within exchanges due to changes in the price of the underlying asset.  A surge of long liquidations means a material drop in the price of the underlying cryptocurrency, while a surge of short liquidations means the opposite.

📉 [Set "BTC Long Liquidation" Preset Alert](https://cryptoquant.com/alert?asset=btc\&category=derivatives\&metric=long-liquidations\&thresholdValue=200\&thresholdType=UP\&resolution=MIN\&key=long_liquidations\&exchange=all_exchange\&symbol=all_symbol\&memo=Unusually+many+long+positions+are+liquidated.\&utm_source=notion\&utm_medium=onboard\&utm_campaign=market_data\&utm_content=market_preset)

📈[ Set "BTC Short Liquidation" Preset Alert](https://cryptoquant.com/alert?asset=btc\&category=derivatives\&metric=short-liquidations\&thresholdValue=200\&thresholdType=UP\&resolution=DAY\&key=short_liquidations\&exchange=all_exchange\&symbol=all_symbol\&memo=Unusually+many+short+positions+are+liquidated.\&utm_source=notion\&utm_medium=onboard\&utm_campaign=market_data\&utm_content=market_preset)

***

### 2. Funding Rates

Predict investor sentiment by using funding rates

<figure><img src="/files/ttP3te5QDSvUidgLyzxD" alt=""><figcaption></figcaption></figure>

Funding rates refer to the regular payments made to a relatively smaller subset of investors, taking on (contrarian) positions in the form of a long or short positions - by the relatively larger number of investors on the other side. Since there is a higher risk in taking positions against the majority sentiment, larger number position investors are paying smaller number position investors to maintain the positions. If the funding rate is above 0, it means more investors are predicting a bullish crypto market and vice-versa.

{% embed url="<https://cryptoquant.com/asset/btc/chart/derivatives/funding-rates?chartStyle=column&ema=0&exchange=all_exchange&metricScale=linear&priceScale=log&sma=0&window=DAY>" %}

{% embed url="<https://cryptoquant.com/asset/eth/chart/derivatives/funding-rates?chartStyle=column&ema=0&exchange=all_exchange&metricScale=linear&priceScale=log&sma=0&window=DAY>" %}

### 3. Open Interest

Estimate resistance (sell orders in waiting) and support (buy orders in waiting) using open interest

<figure><img src="/files/CvT56aqbvkkqKZ9lW6My" alt=""><figcaption></figcaption></figure>

Open interest is defined as the number of open positions, a non-closed deal for long/short, currently on derivative exchanges. An increase in open interest refers to the increase in the crypto market's volatility. Through open interest, crypto investors can speculate on price resistance (many selling orders are in waiting) and support (many buying orders are in waiting) levels.

{% embed url="<https://cryptoquant.com/asset/btc/chart/derivatives/open-interest?chartStyle=line&ema=0&exchange=all_exchange&metricScale=linear&priceScale=log&sma=0&symbol=all_symbol&window=DAY>" %}

{% embed url="<https://cryptoquant.com/asset/eth/chart/derivatives/open-interest?chartStyle=line&ema=0&exchange=all_exchange&metricScale=linear&priceScale=linear&sma=0&symbol=all_symbol&utm_campaign=market_data&utm_content=market_overview&utm_medium=onboard&utm_source=notion&window=DAY>" %}

***

{% hint style="info" %}
**Further Notice**

1. Further information is available on [CryptoQuant Data Guide](https://dataguide.cryptoquant.com/)
2. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.&#x20;
   {% endhint %}


# 3 Key Indicators

## On what basis would professional investors invest?

Professional investors combine on-chain and market data to create indicators or signals designed to 'flash' or alert them before changes in prices occur. What would be the most popular indicator in CryptoQuant? Check 3 indicators that have been viewed the most.

***

### 1. MVRV (Market Value to Realized Value)

A valuation indicator to determine potential bubbles by analyzing cost basis

<figure><img src="/files/TKZrhGzR6NQMfUM4BVRU" alt=""><figcaption></figcaption></figure>

Long-term holders hold Bitcoins long enough until the price meets their return expectations before selling them. When selling Bitcoins, the transaction is made to other wallets through OTC deals or crypto exchanges, which can then be considered realized revenue. Realized Cap is the sum of all these transactions made in Bitcoins.

When there is a gap between Realized Cap and Market Cap, the MVRV number will increase, which can also be interpreted as unrealized profit or loss increasing. When the MVRV ratio increases above a certain threshold this means that the asset is overvalued. On the other hand, when the MVRV number decreases beyond a certain threshold, this can be interpreted as participants holding unrealized losses and that the asset is undervalued.

Generally, MVRV above 3.7 is considered overvalued, and below 1 is considered as undervalued.

👉 [Click to view "Live MVRV chart"](https://cryptoquant.com/overview/btc-market-indicator/197?utm_source=notion\&utm_medium=onboard\&utm_campaign=indicator\&utm_content=indicator_overview)

⏰ [Click to set "MVRV Preset Alert when BTC is overvalued"](https://cryptoquant.com/alert?asset=btc\&category=market-indicator\&metric=mvrv-ratio\&thresholdValue=3.7\&thresholdType=UP\&resolution=DAY\&key=mvrv\&memo=Market%20price%20is%20too%20high%20compared%20to%20realized%20price.%20\(Possibly%20overvalued\)\&utm_source=notion\&utm_medium=onboard\&utm_campaign=preset_alert\&utm_content=indicator_alert)&#x20;

⏰ [Click to set "MVRV Preset Alert when BTC is undervalued"](https://cryptoquant.com/alert?asset=btc\&category=market-indicator\&metric=mvrv-ratio\&thresholdValue=1\&thresholdType=DOWN\&resolution=DAY\&key=mvrv\&memo=Market%20price%20is%20too%20low%20compared%20to%20realized%20price.%20\(Possibly%20undervalued\)\&utm_source=notion\&utm_medium=onboard\&utm_campaign=preset_alert\&utm_content=indicator_alert)

***

### 2. NUPL (Net Unrealized Profit/Loss)

An indicator to determine the amount of unrealized profit/loss

<figure><img src="/files/bQGpG3GNXY65KetPSDJA" alt=""><figcaption></figcaption></figure>

NUPL uses Realized Cap to show the ratio of Unrealized Profit/Loss. If there is an increase in Unrealized Profit in the blockchain network, the probability of a price drop increases. Vice versa, if there is an increase in Unrealized Loss in the blockchain network, the probability of a price rise increases.

Generally, in the long term, NUPL above 0.75 is considered overvalued, and below 0 is considered undervalued.

👉 [Click to view "Live NUPL chart"](https://cryptoquant.com/overview/btc-network-indicator/16429?utm_source=notion\&utm_medium=onboard\&utm_campaign=market_indicator\&utm_content=indicator_overview)

⏰ [Click to set "NUPL Preset Alert when BTC is overvalued"](https://cryptoquant.com/alert?asset=btc\&category=network-indicator\&metric=net-unrealized-profit-loss-nupl\&thresholdValue=0.75\&thresholdType=UP\&resolution=DAY\&key=nupl\&memo=Market%20price%20is%20too%20high%20compared%20to%20realized%20price.%20\(Possibly%20overvalued\)\&utm_source=notion\&utm_medium=onboard\&utm_campaign=preset_alert\&utm_content=indicator_alert)

⏰ [Click to set "NUPL Preset Alert when BTC is undervalued"](https://cryptoquant.com/alert?asset=btc\&category=network-indicator\&metric=net-unrealized-profit-loss-nupl\&thresholdValue=0\&thresholdType=DOWN\&resolution=DAY\&key=nupl\&memo=Market%20price%20is%20too%20low%20compared%20to%20realized%20price.%20\(Possibly%20undervalued\)\&utm_source=notion\&utm_medium=onboard\&utm_campaign=preset_alert\&utm_content=indicator_alert)

***

### 3. LTH-SOPR(Long-term Holder Spent Output Profit Ratio)

An indicator to capture long-term holder's investment

<figure><img src="/files/kMn7HU6P4KjbfpQoDzwn" alt=""><figcaption></figcaption></figure>

Since Bitcoin trading is like using a check. Let's say John needs to give Jane $100. When John gives Jane $100 by using a $1K check, Jane receives a $1K check from John, creates a $900 check and $100 check from a $1K check, and returns a $900 check to John. The $1K check will then be disposed of. This kind of check system in Bitcoin is called UTXO(Unspent Transaction Output).

LTH-SOPR is an indicator of how much profit/loss is generated from UTXOs that have not been used for over 155 days. If the profit is greater using the UTXO(check), the LTH-SOPR value increases, and vice versa for the loss.

Generally, LTH-SOPR above 1 is considered long-term holders are making a profit, and below 1 is considered long-term holders are making a loss.

👉 [Click to view "Live LTH-SOPR chart"](https://cryptoquant.com/overview/btc-market-indicator/16442?utm_source=notion\&utm_medium=onboard\&utm_campaign=indicator\&utm_content=indicator_overview)

⏰ [Click to set "LTH-SOPR Preset Alert when BTC is overvalued"](https://cryptoquant.com/alert?asset=btc\&category=market-indicator\&metric=long-term-holder-sopr\&thresholdValue=13\&thresholdType=UP\&resolution=DAY\&key=lth_sopr\&memo=Long-tem%20holder%27s%20realized%20price%20is%20too%20high.%20\(Possibly%20overvalued\)\&utm_source=notion\&utm_medium=onboard\&utm_campaign=preset_alert\&utm_content=indicator_alert)&#x20;

⏰ [Click to set "LTH-SOPR Preset Alert when BTC is undervalued"](https://cryptoquant.com/alert?asset=btc\&category=market-indicator\&metric=long-term-holder-sopr\&thresholdValue=1\&thresholdType=DOWN\&resolution=DAY\&key=lth_sopr\&memo=Long-term%20holder%27s%20realized%20price%20is%20too%20low%20\(Possibly%20Undervalued\)\&utm_source=notion\&utm_medium=onboard\&utm_campaign=preset_alert\&utm_content=indicator_alert)

***

{% hint style="info" %}
**Further Notice**

1. More details are in [CryptoQuant Data Guide](https://dataguide.cryptoquant.com/)
2. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
   {% endhint %}


# Deriving Insights

Don't let the inflow alert fool you

## Our data provides more detail than just a ‘Big Inflow’

Imagine if you can monitor the stocks in the stock market by the holding period, holding amount, or the number of investors’ holding them. It would certainly be THE information that can enhance your stock trading strategy. This is exactly what UTxOs can offer you in the cryptocurrency market.

{% content-ref url="/pages/H2lrXL6KUr0TBu9Etqrt" %}
[What is a UTxO?](/what-is-cryptoquant/background-knowledge/what-is-a-utxo)
{% endcontent-ref %}

What’s even cooler about our new data updates? We have advanced UTxO data that’s only available on our service that can be a game-changer for your data-driven investment strategy.

Let’s dive in..

### 1. Check the impact of Exchange Inflow measured by the combination of Bitcoin’s amount and age

Filter all the noise that Whales are creating that may distract you

<figure><img src="/files/Xys2hxVJt6KYUf9oeChY" alt=""><figcaption></figcaption></figure>

Unusual exchange inflow does not necessarily mean whales are dumping. It can be exchanges are doing a reshuffling of their wallet addresses, whales are sending their coins to take on long positions, or simply changing their storage mechanism. Exchange Inflow CDD is a subset of Coin Days Destroyed (CDD) where coins are destroyed when flowing into exchanges. This indicator is a noise-removed version of CDD where we only share the CDD that occurred for exchanges inflow.

{% embed url="<https://dataguide.cryptoquant.com/utxo-data-indicators/coin-days-destroyed-cdd>" %}

{% embed url="<https://dataguide.cryptoquant.com/exchange-flows-indicators/exchange-inflow-cdd>" %}

### 2. Check which cohort is making the transactions

Prepare the worst-case scenario by knowing who’s ready to dump

<figure><img src="/files/UB1iIhRi3TFaumnBAph9" alt=""><figcaption></figcaption></figure>

Whale alerts can be manipulated without being supplemented by UTxO data. With the combination of flow data and UTxO data, you can have an optimized strategy by defining the purpose of the exchange flows. Unlike UTxO Bands, Exchange Inflow - Spent Output Bands focus on the UTXOs that were destroyed within the set metric window. With the help of Spent Output Age Bands, it is possible to pinpoint which UTXO Bands were destroyed and in what amount. Using this knowledge, investors can correlate any price movement or changes in the network with the action of a specific cohort.

{% embed url="<https://dataguide.cryptoquant.com/utxo-data-indicators/utxo-bands-age/spent-output-age-bands>" %}

{% embed url="<https://dataguide.cryptoquant.com/exchange-flows-indicators/exchange-inflow-spent-output-age-bands>" %}

### 3. Check each cohort by Bitcoin’s holding amount, or holding period

Monitor how a certain group of holders is behaving in the market

<figure><img src="/files/HdNxqpd6IsVRrdb5z1xX" alt=""><figcaption></figcaption></figure>

Knowing each UTxO’s age band can enable us to learn more about investors’ actions as they have entered the market at a certain price range, and possibly project the dominant expected return on their investments compared to their entry price.

<figure><img src="/files/5ePgvXSipqNWnz8WrNiY" alt="" width="563"><figcaption></figcaption></figure>

Each UTxO age/value band metric allows you to learn more about certain cohort’s actions:

1. Find out each band’s total UTxO amount to the project **market cap held by each cohort**.
2. Find out each band’s **realized cap which removes the UTxOs that are dormant in the market**.
3. Find out each band’s UTxO count to **estimate the number of holders**.
4. Find out each band’s transaction volumes to **speculate which group was behind certain price actions**.

{% embed url="<https://dataguide.cryptoquant.com/utxo-data-indicators/utxo-bands-age>" %}

{% embed url="<https://dataguide.cryptoquant.com/utxo-data-indicators/utxo-bands-value>" %}

***

{% hint style="info" %}
**Further Notice**

1. Further information is available on [Exchange Flows/Indicators](/cryptoquant-metrics/exchange) and [UTXO Data/Indicators](/cryptoquant-metrics/utxo)
2. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
   {% endhint %}


# 6 Minute Feature Guide


# 1. Charting Overview

The past is a mirror of the future.

We know that most CryptoQuant users leverage our service to monitor data on our overview charts. To support your data-driven investment, we updated CryptoQuant with improved data-loading latency, developed new features, and improved general UI.

## 📝 4 Tips to use the Chart better

<figure><img src="/files/f5Nu9G8U8ISwVpXT69Kz" alt=""><figcaption></figcaption></figure>

1. **Select asset type** CryptoQuant offers various assets, including BTC, ETH, Stablecoins, and ERC20 Tokens. You can view the same metric in other assets by selecting the asset type.<br>
2. **Use Dashboard and Alerts**

   To save you time, CryptoQuant offers personal dashboards. You can quickly check your favorite charts that you view the most and curate them on the Dashboard by customized order and size. You can also get real-time data updates when you are not unable to monitor the data by setting custom alert features.<br>

   <figure><img src="/files/2FNlgYu79f9KuU5MNN8M" alt=""><figcaption></figcaption></figure>
3. **Customize the chart** Some data gives a more precise trend direction by moving averages, so we integrated SMA and EMA in the overview chart. SMA is a Simple Moving Average of the closing price of the {n-day/hour/block}. EMA is the Exponential Moving Average of the closing price of the {n-day/hour/block}. EMA applies more weight to data that is more current.

   In addition, now you can easily select entity, resolution, scale, and chart type in the chart you are monitoring. Your customized settings will also be applied and stored to the personal dashboard when you add them directly.<br>
4. **Adjust the time period** CryptoQuant now offers full history of the data to all paid plan subscribed users. You can now highlight and scroll over the exact period to drill down and analyze specific time-series.

***

{% hint style="warning" %}

#### Note on Possible Delay

Please note that end-of-day data of exchange/miner/inter-entity flow will be ready to serve from UTC 00:00 AM that may take up to an hour. Since block confirmation takes time due to the nature of the blockchain, blocks created before 00:00 AM are reflected in the calculation sequentially. The block confirmation time varies from time to time, so the safe time to query the endpoint for a full day would be an hour after the day. (i.e., UTC 1:00AM) Note that Top 10 data will return null until the block confirmation is complete. Search more on CryptoQuant's [API docs Time convention](https://cryptoquant.com/docs#section/Time-Convention)

Combining blockchain data with our labeling addresses takes between 1 and 5 minutes. Therefore, to get the latest data points safely, we recommend you to request data after 10 minutes.
{% endhint %}

{% hint style="info" %}
**Further Notice**

1. More details are in [CryptoQuant Charts](https://cryptoquant.com?utm_source=notion\&utm_medium=onboard\&utm_campaign=OverviewChart\&utm_content=OverviewChart)
2. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice
   {% endhint %}

{% embed url="<https://intercom.help/cryptoquant/en/collections/2794679-chart-overview>" %}


# 2. Set Alerts

Do you have a sleeping disorder after a crypto investment?

On-chain and market data's dramatic changes are often precedent indicators of market value change. However, it's impossible to track all the changes by staring at the data 24/7. If you set alerts, you can be prepared for changes in the market without monitoring them constantly. Set preset alerts recommended by CryptoQuant, or customize your alerts to get the latest data updates.

***

## Alerts are important

<figure><img src="/files/VKKJPPvGsORhbxX9wz5F" alt=""><figcaption><p>An example of setting alerts for aSOPR to determine BTC market tops</p></figcaption></figure>

The example from the above user's alert shows an over 10% price drop followed by the aSOPR alert in March. Likewise, you can also take a better position in the market without monitoring the data changes by pulling all-nighters every night.

***

## Interested in Following Whales, ETF Flows, or Miner Behavior? Check our Analyst’s Preset Alerts

### Track Whales

<figure><img src="/files/niqGfiryBZeLj78QiRyv" alt="Track if Bitcoin Whales are Buying or Selling"><figcaption><p>Track if Bitcoin Whales are Buying or Selling</p></figcaption></figure>

With one click you can subscribe to alerts following whales’ movements. Find out when smart money is moving into Bitcoin to stay ahead.

> 🐳 [Know when Whales are Buying and Selling](https://cryptoquant.com/alert/preset/65f9458e9bcfce562f1e7d0d?utm_source=website\&utm_medium=userguide\&utm_campaign=preset-alert\&utm_content=julio-moreno)&#x20;

***

### Follow the ETF Flow

<figure><img src="/files/oJA7PauJAqEgKHDkNPnK" alt=""><figcaption><p>Preset Alerts to Follow Spot Bitcoin ETFs</p></figcaption></figure>

Bitcoin Spot ETFs are eating up the market, therefore, making sure you follow their movements is paramount to having a leg up on the market. In one click, you can follow all of our recommended preset alerts.

> [📈 Track Institutional Investors' ETF Inflows](https://cryptoquant.com/alert/preset/65f944db9bcfce562f1e7d0a?utm_source=website\&utm_medium=userguide\&utm_campaign=preset-alert\&utm_content=ki-young-ju)

***

### Monitor Miners

<figure><img src="/files/uyPlFpmeFDXMleLVjZ57" alt=""><figcaption><p>Monitor the Sell-Off from Bitcoin Miners</p></figcaption></figure>

Bitcoin miners can change the market. Stay informed about when they sell their Bitcoin to make smarter trades and reduce risk.

> [⛏️ Understand the Miners and Track their Sell-Offs](https://cryptoquant.com/alert/preset/65f946079bcfce562f1e7d11?utm_source=website\&utm_medium=userguide\&utm_campaign=preset-alert\&utm_content=ki-young-ju)

***

{% hint style="info" %}
**Further Notice**

1. Further information is available on [CryptoQuant Data Guide](https://dataguide.cryptoquant.com/)
2. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
   {% endhint %}

{% embed url="<https://intercom.help/cryptoquant/en/collections/2793995-alert-settings>" %}


# 3. Dashboards

Add the charts of your choice to your dashboard and manage them on one page.\
You don't need to search for the metrics every time and can compare or analyze the metrics with other indicators without going back and forth.

## How to use Dashboards better

1. Your customized settings will be saved when you add the chart to your dashboard. You do not have to change the resolution, add SMA, or change the scale every time.<br>
2. You can categorize the charts to manage different kinds of investment analytics or even make a separate dashboard for the public.\
   Click '+ Add Dashboard' to create a new dashboard, and add a new set of charts there. Or copy the existing dashboard to make a new one if you are only making a few changes to the list.<br>

   <div align="left"><figure><img src="https://downloads.intercomcdn.com/i/o/534122391/5b275b383da4f1dc6637acb4/%EC%8A%A4%ED%81%AC%EB%A6%B0%EC%83%B7+2022-06-22+%EC%98%A4%ED%9B%84+6.09.35.png" alt="" width="375"><figcaption></figcaption></figure></div>
3. You can add other people's dashboards to yours.\
   If you have the shared link of another user's dashboard, click on Copy to My Dashboard, and it will be added. Or simply click the \*star\* button and it will be added to your Favorites.

   <div align="left"><figure><img src="https://downloads.intercomcdn.com/i/o/534122165/bf0860e34697437aa2534333/%EC%8A%A4%ED%81%AC%EB%A6%B0%EC%83%B7+2022-06-22+%EC%98%A4%ED%9B%84+5.42.03.png" alt="" width="188"><figcaption></figcaption></figure></div>
4. You can share your dashboard with others too.\
   Click the three dots next to the dashboard's name → Click 'Share' → Choose the channel that you would like to share it on or share the URL.

   <div align="left"><figure><img src="https://downloads.intercomcdn.com/i/o/534123231/e3ca60ddf34632c222ed9df5/%EC%8A%A4%ED%81%AC%EB%A6%B0%EC%83%B7+2022-06-22+%EC%98%A4%ED%9B%84+6.11.00.png" alt="" width="375"><figcaption></figcaption></figure></div>
5. Change the size of charts by clicking and dragging the bottom right corner of the chart.
6. Arrange your chart's placement by clicking and dragging the top of the chart.

<div align="left"><figure><img src="https://downloads.intercomcdn.com/i/o/534152509/266a8aaca43d2d720d00b02b/%EC%8A%A4%ED%81%AC%EB%A6%B0%EC%83%B7+2022-06-22+%EC%98%A4%ED%9B%84+6.58.56.png" alt="" width="375"><figcaption></figcaption></figure></div>

{% hint style="info" %}
**Further Notice**

1. More details are in [CryptoQuant Dashboard](https://cryptoquant.com/analytics/dashboard)
2. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice
   {% endhint %}


# 4. Quicktake

We’re all busy. Get data insights quickly via Quicktake feed.

We know that crypto market analysis is difficult for investors. CryptoQuant operates Quicktake bulletin to lower the hurdles for retail investors by providing simple, comprehensible real-time market analysis. Quicktake is a platform where talented analysts worldwide utilize different data to analyze the market and share insights.

Learn how to make better use of professional analysts' real-time market analysis through this mail.

👉 [Click to "Find Out Whether We’re in the Bear Market"](https://cryptoquant.com/quicktake?utm_source=notion\&utm_medium=onboard\&utm_campaign=Quicktake\&utm_content=Quicktake)

## How to use Quicktake better

<figure><img src="/files/7bh7N8ozgk3QXcNKUJC2" alt="" width="422"><figcaption></figcaption></figure>

1. **Check the tags to save your time!** #Bullish: Analysis that predicts the price rise #Bearish: Analysis that predicts the price fall #On-chain analysis: Analysis based on blockchain transactional data #Technical analysis: Analysis based on cryptocurrency price and trading volume #Sentiment analysis: Analysis based on market sentiment data
2. **To read previous analyses, check the profile** You can read analyst's previous postings by clicking the profile
3. **Check chart images** In order to fully understand the post analysis, check the supplement info in charts. Charts visualize the content that cannot be covered in the post's text
4. **Share your bias** Share your thoughts on whether the posts are indicating Bullish/Bearish price actions, and also monitor general users’ sentiment
5. **Compare with live charts** You can check the real-time value of the data mentioned in the posting by clicking View Live Chart. Compare the charts to see that the post's backup data is up to date.
6. **Save posting**

<figure><img src="/files/xb4B6NxMQ7PK24Iw5xeJ" alt="" width="375"><figcaption></figcaption></figure>

If you click "Like," the post would be saved in your profile.

7. **Join the discussion**

The comment is open for all users who want to share ideas, ask questions, or even challenge the writer’s own opinion. Learn how other users interpret data. Check our Community’s Guidelines in order to make the best out of our service.

***

## Would you like to contribute on Quicktake?

We're looking for top analysts who can digest our data and contribute analysis for our 1.5M+ global investors, traders and analysts. Join CryptoQuant on our mission to lower the hurdle for investors to make data-driven investment decisions.

👉 [Click to "Apply for CQ Verified Author"](https://docs.google.com/forms/d/e/1FAIpQLSdaDfa--RFQv6llBqRd6WiwJpmbKLNtgE3gw-e8B8SySvXILw/viewform?usp=sf_link)

{% hint style="info" %}
**Further Notice**

1. More details are in [CryptoQuant Quicktake](https://cryptoquant.com/quicktake?utm_source=notion\&utm_medium=onboard\&utm_campaign=Quicktake\&utm_content=Quicktake)
2. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice
   {% endhint %}


# 5. Top 15 Pro Charts

Save preset charts from our top analysts! Save charts, save time.

You can adjust and customize charts in Pro Chart menu to fit your needs. You can view the charts that our top analysts are using, so here are some of the top charts in use.

CryptoQuant Pro allows you to copy preset charts. Click the links below and check out preset charts to see whale dumping, miner selling, whale accumulation, huge OTC deals, buying/selling pressure, market trend, and market sentiment.

![](/files/-MSlDNeSNrB7840VeTKV)

{% content-ref url="/pages/-MSRF7EGKxYjyv11hWiY" %}
[Whale Dumping](/quickstart/6-minute-feature-guide/top-10-presets/whale-dumping)
{% endcontent-ref %}

#### [BTC: All Exchanges Inflow Mean (144-block / 24-hour Moving Average)](#https-cryptoquant.com-prochart-ezer9p3coz)

#### [BTC: Exchange Whale Ratio (72-hour Moving Average)](#https-cryptoquant.com-prochart-hp1a36ual3) &#x20;

{% content-ref url="/pages/-MSRLKhu\_44ax61KaLwg" %}
[Miner Selling](/quickstart/6-minute-feature-guide/top-10-presets/miner-selling)
{% endcontent-ref %}

#### [BTC: All Miners to All Exchanges Flows Transactions Count](#https-cryptoquant.com-prochart-060y46l9xg)&#x20;

#### [BTC: All Miners' Outflows](#https-cryptoquant.com-prochart-pifjvwqcvh)

#### [BTC: Miners' Position Index (MPI; 30-day Moving Average)](#https-cryptoquant.com-prochart-iraofwwrjy)

####

{% content-ref url="/pages/-MSRPapSb8-KEmFPoFFS" %}
[Whale Accumulation](/quickstart/6-minute-feature-guide/top-10-presets/whale-accumulation)
{% endcontent-ref %}

#### [BTC: Coinbase Premium Index](#https-cryptoquant.com-prochart-fdxeih58iv)

#### [BTC: All Exchanges Inflow Mean (7-day Moving Average)](#https-cryptoquant.com-prochart-2gbmp5hb4b)

#### [BTC: Grayscale holdings / GBTC Premium](#https-cryptoquant.com-prochart-nhhv4q1je3)

{% content-ref url="/pages/-MSROVaIeKkIQSfpUMPE" %}
[Large OTC deals](/quickstart/6-minute-feature-guide/top-10-presets/otc-indicators)
{% endcontent-ref %}

#### [BTC: Coinbase Outflow by Block](#https-cryptoquant.com-prochart-jxfn72i23w)

#### [BTC: Fund Flow Ratio & Tokens Transferred](#https-cryptoquant.com-prochart-0j2x4hc2ay)

{% content-ref url="/pages/-MSRQoJf1ed6QsAd5K9i" %}
[Buying/Selling Pressure](/quickstart/6-minute-feature-guide/top-10-presets/buying-selling-pressure)
{% endcontent-ref %}

#### [All Stablecoins: All Exchanges Inflow Transaction Count](#https-cryptoquant.com-prochart-v0y0s61x7z)

#### [BTC: Stablecoin Ratio in USD (MACD)](#https-cryptoquant.com-prochart-w21ship2hi)

{% content-ref url="/pages/-MSRRnoJReuMfHBvona-" %}
[Market Trend](/quickstart/6-minute-feature-guide/top-10-presets/bullish-bearish-trend)
{% endcontent-ref %}

#### [BTC: All Exchanges Reserve](#https-cryptoquant.com-prochart-fp272opepr)

#### [BTC: All Exchanges Netflow (30-day Moving Average)](#https-cryptoquant.com-prochart-nfihpalo76)

{% content-ref url="/pages/-MSWqQdQyiYdeS-fA-wH" %}
[Market Sentiment](/quickstart/6-minute-feature-guide/top-10-presets/market-sentiment)
{% endcontent-ref %}

#### [BTC: Aggregated Funding Rate / Futures Open Interest for All Exchanges](#https-cryptoquant.com-prochart-ephx42jykg)

#### [BTC: Estimated Leverage Ratio for all exchanges](#https-cryptoquant.com-prochart-hwwqnoc8jl)


# Miner Selling

Miners are OG whales. They periodically send a certain amount of BTC to exchanges, but if they decide to sell more coins, their outflow is likely to be significant.

## BTC: All Miners to All Exchanges Flows Transactions Count

This indicator helps to see how frequently all miners transfer Bitcoin to all exchanges. Miners periodically send a certain amount of Bitcoin to the exchange from their mining wallets. If they send Bitcoin to exchanges more frequently, the price will likely be bearish as they are likely to sell additional bitcoin on the exchange, not through the OTC market.

### 👉 [Save Chart](https://cryptoquant.com/prochart/060y46l9xg)&#x20;

![](/files/-MSRMFtvieFXfQ70tyK_)

{% content-ref url="/pages/-MSReO5hRJfzkC5cWi8U" %}
[Miner to Exchange](/cryptoquant-metrics/miner/miner-to-exchange)
{% endcontent-ref %}

## BTC: All Miners' Outflows

This indicator is the total transferred amount from mining wallets that have received Bitcoin block rewards. Miners periodically send Bitcoin to other wallets, but if the price is unusually high, they will sell bitcoin in over-the-counter (OTC) market or exchanges. Significant miner outflow is a bearish signal.

### 👉 [Save Chart](https://cryptoquant.com/prochart/pifjvwqcvh)&#x20;

![](/files/-MSRMXLHlHaOrmjQw6nu)

{% content-ref url="/pages/-MSlWbOivIl1Rk3akTCS" %}
[Miner Outflow](/cryptoquant-metrics/miner/miner-outflow)
{% endcontent-ref %}

## BTC: Miners' Position Index (MPI; 30-day MA)

MPI is all miners' outflow divided by its one-year moving average. If miners withdraw an unusually large amount of Bitcoins compared to the past year, the MPI increases, and the Bitcoin price is likely to be bearish. If you draw lines when MPI is higher than 2.5, it often matches both local and all-time-highs. On the other hand, if the MPI is low, miners hold Bitcoin, meaning it's likely to be bullish. They were HODLers in the 2018 and 2020 great sell-offs though.

### 👉 [Save Chart](https://cryptoquant.com/prochart/iraofwwrjy)&#x20;

![](/files/-MSRN9X1R3js1LbmB5a0)

{% content-ref url="/pages/-MCFj\_dMP5mbOVPYHasD" %}
[Miners' Position Index (MPI)](/cryptoquant-metrics/miner/miners-position-index)
{% endcontent-ref %}


# Whale Accumulation

Whales can manipulate the market. When they accumulate Bitcoins, the price is likely to be bullish.

## BTC: Coinbase Premium Index

This is the price difference between Coinbase's BTCUSD pair and Binance's BTCUSDT pair. The higher the premium means that Coinbase whales are accumulating Bitcoin despite the higher price. The 2020 bull-run was driven by institutional investors and high net-worth individuals in the U.S., and they were using Coinbase. When the Bitcoin price broke 20k, 30k, and 40k, the Coinbase premium was more than $50.

### 👉 [Save Chart](https://cryptoquant.com/prochart/fdxeih58iv)&#x20;

![](/files/-MSRQ2ogvnQTcq4CFthm)

![](/files/-MSRQDazyGS6YjAJEjig)

![](/files/-MSRQLL-UhMrc2EkkZsM)

## BTC: All Exchanges Inflow Mean (7-day MA)

Whales tend to realize profits when retail investors are active in the market. This indicator is the 7-day moving average on the All Exchanges Inflow Mean. Bitcoin price is likely to go up when whales are active in the market in the long term. When this indicator goes below 1 BTC, it means retail investors are involved, and it's likely to be bearish.

### 👉 [Save Chart](https://cryptoquant.com/prochart/2gbmp5hb4b)&#x20;

![](/files/-MSRQXizJX9dduWkhuLg)

{% content-ref url="/pages/-MSlVoLc7XKvcbGc8o5q" %}
[Exchange In/Outflow and Netflow](/cryptoquant-metrics/exchange/exchange-in-outflow-and-netflow)
{% endcontent-ref %}

## BTC: Grayscale holdings / GBTC Premium

Institutions are also holders. They agree on the digital gold narrative and have decided to hold Bitcoin in order to hedge inflation, among other strategies. Many U.S. institutions buy Bitcoin through Grayscale (GBTC) and can contribute to GBTC's premium. Our users often use this indicator as a bullish signal.

![](/files/-MSk6d6EuNG2zRyPaClG)

### 👉 [Save Chart](https://cryptoquant.com/prochart/nhhv4q1je3) &#x20;

{% content-ref url="/pages/-MSMqsqol4iU\_8bjJL-N" %}
[Grayscale Bitcoin Trust (GBTC)](/cryptoquant-metrics/fund-premium/grayscale-bitcoin-trust-gbtc)
{% endcontent-ref %}

{% content-ref url="/pages/-MSRev6BZqJ\_FGv9246b" %}
[Grayscale Ethereum Trust (ETHE)](/cryptoquant-metrics/fund-premium/grayscale-ethereum-trust-ethe)
{% endcontent-ref %}


# Large OTC deals

OTC (Over-the-counter) deals are a popular method of whale accumulation

## BTC: Fund Flow Ratio & Tokens Transferred

Tokens Transferred refers to the total amount of Bitcoin that has moved on the network. Fund Flow Ratio is the amount of Bitcoin used for deposits/withdrawals on the exchange divided by tokens transferred.

If the Tokens Transferred is high, and the Fund Flow Ratio is low, it might indicate OTC transactions are active. For example, when the Bitcoin price was ranging $10k in 2020, 4 million Bitcoin ($40B) moved on the network, where only 3% of the transactions took place on the exchange, and 97% of the transactions took place outside the exchanges. After that, many institutions announced that they had purchased Bitcoin, including Microstrategy, Ruffer, One River, etc.

### 👉 [Save Chart](https://cryptoquant.com/prochart/0j2x4hc2ay)&#x20;

![](/files/-MSRPSx4aB96GZLJFIWK)

{% content-ref url="/pages/-MSMYKIwTEuqo5XJdYNv" %}
[Fund Flow Ratio](/cryptoquant-metrics/exchange/fund-flow-ratio)
{% endcontent-ref %}


# Buying/Selling Pressure

On-chain indicators suggest potential Bitcoin buying/selling pressure

## All Stablecoins: All Exchanges Inflow Addresses Count

This is the number of deposit wallets for all types of stablecoins flowing into all exchanges by block. If this indicator goes above 80, the price will likely be a short-term bullish, typically around 1-5%. Since one ETH block interval is 10-15 seconds, it means 80 stablecoins are deposited consecutively within 15 seconds. The signal will be stronger if it hits 80 more than two to three times.

### 👉[Save Chart ](https://cryptoquant.com/prochart/v0y0s61x7z)

![](/files/-MSRR3OPlXIeAxfEg_yZ)

{% content-ref url="/pages/-MSlWHAuQy09HttdejAZ" %}
[Stablecoin Exchange Transactions Count](/cryptoquant-metrics/stablecoin/stablecoin-exchange-transactions-count)
{% endcontent-ref %}

{% content-ref url="/pages/-MSlWHJUCHG9W4oIBadk" %}
[Stablecoin Exchange Addresses Count](/cryptoquant-metrics/stablecoin/stablecoin-exchange-addresses-count)
{% endcontent-ref %}

## BTC: Stablecoin Ratio in USD (MACD)

This indicator is Bitcoin holdings in USD on all exchanges divided by stablecoin holdings. It helps to see the potential selling pressure by looking at relative power between Bitcoin and stablecoin reserves.

### 👉[Save Chart ](https://cryptoquant.com/prochart/w21ship2hi)

![](/files/-MSRRj1YFS0xa0SC76sQ)

{% content-ref url="/pages/-MSMYSDIBLqbTpYTN5wD" %}
[Stablecoins Ratio](/cryptoquant-metrics/stablecoin/stablecoins-ratio)
{% endcontent-ref %}


# Market Trend

Bitcoin supply on exchanges can determine bullish/bearish market trend

## BTC: All Exchanges Reserve

Since the inception of Bitcoin, the amount of BTC held by the exchanges has steadily increased. However, starting from February 2020, investors have started to withdraw large volumes of BTC from these exchanges for strategic long term holding. Such withdrawals have created pressure on BTC liquidity, and the sell-side crunch drove the BTC price since mid-2020 according to the chart below.

### 👉 [Save Chart](https://cryptoquant.com/prochart/fp272opepr)&#x20;

![](/files/-MSRSRa1AsOeG2wcu6sH)

{% content-ref url="/pages/-MSlW6DEcPtp5wCCn2FK" %}
[Exchange Reserve](/cryptoquant-metrics/exchange/exchange-reserve)
{% endcontent-ref %}

## BTC: All Exchanges Netflow (30-day MA)

Netflow is the difference between exchange inflow and outflow. In the bull market, netflow is likely to trend positive. While during bear markets it's likely to trend negative. For example, in the 30-day moving average, Netflow hit a yearly high at the time of its high in 2018, and Netflow hit a yearly low when Bitcoin was ranging $10,000 in 2020.

### 👉 [Save Chart](https://cryptoquant.com/prochart/nfihpalo76)&#x20;

![](/files/-MSRSe7LpzCaMFWiQI7x)

![](/files/-MSRSfZrL7I7dk37MVGv)

{% content-ref url="/pages/-MSlVoLc7XKvcbGc8o5q" %}
[Exchange In/Outflow and Netflow](/cryptoquant-metrics/exchange/exchange-in-outflow-and-netflow)
{% endcontent-ref %}


# Market Sentiment

Indicators to see how investors feel about the market

## BTC: Aggregated Funding Rate / Futures Open Interest All Exchanges

If futures open interest for all exchanges rises rapidly, there's likely to be big price fluctuations as cascade liquidations begin to occur. In the bull market, aggregated funding rate for all exchanges usually helps to capture potential bottoms.

### 👉 [Save Chart](https://cryptoquant.com/prochart/ephx42jykg)&#x20;

![](/files/-MSk533xW_OpzYXd2QwX)

{% content-ref url="/pages/-MCB5pxMfzUC4Of9Lza9" %}
[Open Interest](/cryptoquant-metrics/market/open-interest)
{% endcontent-ref %}

{% content-ref url="/pages/-MSMYizjBAWujxeXyock" %}
[Funding Rates](/cryptoquant-metrics/market/funding-rates)
{% endcontent-ref %}

## BTC: Estimated Leverage Ratio for all exchanges

By dividing the open interest of exchange by their BTC reserve, you can estimate relative average user leverage. Whenever the leverage value reaches a high, there is rapid volatility that ensues. This is similar to Open Interest, but more accurate as it reflects the growth of the exchange itself. You can see how aggressive people are and how conservative they are in terms of investment.

### 👉 [Save Chart](https://cryptoquant.com/prochart/hwwqnoc8jl)

![](/files/-MSk8Q4t_wlj9idulGGI)

{% content-ref url="/pages/-MCB8LtkT1KHjvcF\_2bo" %}
[Estimated Leverage Ratio](/cryptoquant-metrics/market/estimated-leverage-ratio)
{% endcontent-ref %}


# Whale Dumping

Significant Bitcoin deposits from whales usually indicate whale dumping

There are two ways to check whale deposits on the exchange to see the possibility of whale dumping. If these two indicators say that there are many whales on the exchange, Bitcoin price is likely to be bearish or moving sideways.

## BTC: All Exchanges Inflow Mean (24h MA)

This is the average amount of bitcoin deposited into all exchanges. Our users typically utilize this indicator with a 24-hour moving average (or 144 blocks - 10 minutes for block interval). In the 144-block moving average chart, if this indicator goes over 2 BTC during a surge, Bitcoin whale dumping is likely to happen. If it goes below 2 BTC immediately after the dip, it means victim whales are depositing to exchanges but have not yet sold.

### 👉 [Save chart](https://cryptoquant.com/prochart/ezer9p3coz)

![](/files/-MSRH0u-LJnAD70bvIKk)

![](/files/-MSRHAcnsjikjOWaEMMy)

![](/files/-MSRHPpZy3IEwhkJvKTl)

![](/files/-MSRHYWc7-WlAVxhu4d5)

{% content-ref url="/pages/-MSlVoLc7XKvcbGc8o5q" %}
[Exchange In/Outflow and Netflow](/cryptoquant-metrics/exchange/exchange-in-outflow-and-netflow)
{% endcontent-ref %}

## BTC: Exchange Whale Ratio (72h MA)

The exchange Whale Ratio is the relative size of the top 10 inflow transactions to total inflows. In the bull market, it often stays below 85%. On the other hand, in the bear market or a fake bull for a mass-dumping, it usually stays above 85%.

### 👉 [Save Chart  ](https://cryptoquant.com/prochart/hp1a36ual3)

![](/files/-MSRHvfQeymK2Ul7qULS)

![](/files/-MSRIg4RFp92ytCNYtW8)

![](/files/-MSRIpePV0A1SOKbBvJ1)

![](/files/-MSRIuBXsP4h3CsdFDHo)

{% content-ref url="/pages/-MSMYHoSuCqU59aZ-I5H" %}
[Exchange Whale Ratio](/cryptoquant-metrics/market/exchange-whale-ratio)
{% endcontent-ref %}


# 6. Chatbot

Ask anything about on-chain data. Get instant answers powered by AI.

CryptoQuant Chatbot is an AI assistant that helps you explore on-chain data, understand metrics, and get market insights through natural conversation. No need to search through charts or documentation manually — just ask a question and get a data-driven answer right away.

***

### Where to Find the Chatbot

Click the **✦ Ask AI** button in the top navigation bar of the CryptoQuant platform to open the AI chat screen. It's accessible from any page, so you can ask questions while browsing charts, dashboards, or Quicktake articles.

<figure><img src="/files/2zLHJbq7x6H5Xllfg2Os" alt=""><figcaption></figcaption></figure>

***

### What You Can Ask

The Chatbot can answer a wide range of crypto data questions. See the examples below.

#### 1. Metric Explanations

Ask about any on-chain metric available on CryptoQuant. The Chatbot will explain definitions, calculation methods, and how to interpret them.

* *"What is MVRV?"*
* *"What's the difference between SOPR and aSOPR?"*
* *"How do I interpret NUPL?"*

#### 2. Metric Search

Check whether a specific metric is available on CryptoQuant, or get recommendations for metrics that fit your analysis goals. The Chatbot will also provide links to the relevant charts.

* *"Show me charts related to exchange reserves"*
* *"Are there any metrics to track whale activity?"*
* *"Find me metrics related to BTC long-term holders"*
* *"Where can I see the funding rate chart?"*

#### 3. Market Analysis

Get insights on current market conditions based on analysis from CryptoQuant's expert analysts. Answers are powered by professional content such as QuickTake and Research.

* *"Summarize the latest opinions from analysts"*
* *"How's the Bitcoin market looking lately? Give me a full summary using QuickTake and Research"*

#### 4. Platform Feature Guide

Have questions about how to use CryptoQuant features? Ask the Chatbot. It can guide you through setting alerts, creating dashboards, using the API, and more.

* *"How do I set up alerts?"*
* *"How do I create a dashboard?"*
* *"How do I use the API?"*
* *"What's the difference between the Professional and Advanced plans?"*

***

### How to Use the Chatbot

#### Step 1: Open the Chatbot

Click the **✦ Ask AI** button in the top navigation bar. The AI chat screen will appear.

<figure><img src="/files/BhwrZq0euyFL87Kvkuuy" alt=""><figcaption></figcaption></figure>

#### Step 2: Type Your Question

Type your question in the input field at the bottom of the chat panel. Just ask in natural language — no special syntax or commands needed.

#### Step 3: Review the Response

The Chatbot responds with:

* **Direct answers** — Key information for your data or metric questions
* **Chart links** — Links to view the relevant chart directly on CryptoQuant
* **Metric explanations** — Contextual information on how to interpret the data

***

### Available Plans

| Plan         | Daily Limit    | Monthly Limit   |
| ------------ | -------------- | --------------- |
| Basic        | 5 messages     | 50 messages     |
| Advanced     | 50 messages    | 500 messages    |
| Professional | 200 messages   | 2,000 messages  |
| Premium      | 1,500 messages | 15,000 messages |

***

### Notes

* The Chatbot provides data-driven insights for informational purposes. It does not provide financial, investment, or trading advice.
* Responses are generated based on CryptoQuant's on-chain data and may not cover every market scenario.

> The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.


# Exchange Flows/Indicators

Entry into Exchange flow/indicator

<table><thead><tr><th width="236.4828443169023">Data/Indicator</th><th width="274.7164257750657">Definition</th><th>Interpretation</th></tr></thead><tbody><tr><td><strong>Exchange</strong></td><td><p>-An <strong>exchange</strong> is where the actual trading events occur, which reflects the <strong>demand</strong> side</p><p></p><p>-The basic information and why it matters</p><p></p><p>-Find out more on <a data-mention href="/pages/-MCu3abmgunFemkWQ0kq">/pages/-MCu3abmgunFemkWQ0kq</a></p></td><td><p>-Place where the price is mostly determined</p><p></p><p>-In relation to fiat</p></td></tr><tr><td><a data-mention href="/pages/-MSlVoLc7XKvcbGc8o5q">/pages/-MSlVoLc7XKvcbGc8o5q</a></td><td>Amount of coin deposited/withdrawn into/from the exchange wallets </td><td><p></p><ul><li>Increase of inflow             -<strong>Bearish</strong> sign</li><li>Increase of outflow            -<strong>Bullish</strong> sign</li><li>Increasing Trend             Possible volatility            Helps predict the Market Trend</li></ul><p> </p></td></tr><tr><td><a data-mention href="/pages/-MSlW6DEcPtp5wCCn2FK">/pages/-MSlW6DEcPtp5wCCn2FK</a></td><td>The total amount of coins held in the exchange addresses</td><td><p></p><ul><li>High                               High selling pressure                   -<strong>Bearish</strong> sign</li><li>Low                              Low selling pressure                   -<strong>Bullish</strong> sign</li></ul></td></tr><tr><td><a data-mention href="/pages/-MSlVoBHDMAsuiC_uKsY">/pages/-MSlVoBHDMAsuiC_uKsY</a></td><td>The number of unique addresses making inflow/outflow transactions of exchanges</td><td><p></p><p></p><ul><li><p>High </p><p>Large number of investors engagement</p></li><li>Low                            Small number of investors engagement</li><li><p>Increasing trend</p><p>Expanding Interest and Activeness</p></li><li><p>Decreasing Trend</p><p>Diminishing Interest and Activeness</p></li></ul></td></tr><tr><td><a data-mention href="/pages/-MSlVnZSKdvCMEBKOMur">/pages/-MSlVnZSKdvCMEBKOMur</a></td><td>The total number of deposits/withdrawals transactions of the exchange</td><td><p></p><ul><li>High                           Large number of transactions</li><li>Low                            Small number of transactions </li><li><p>Increasing Trend</p><p>Expanding Interest and Activeness</p></li><li><p>Decreasing Trend</p><p>Diminishing Interest and Activeness</p></li></ul></td></tr></tbody></table>

## How to look at indicators

This section identifies the lookout point for individual indicators. These indicators could be divided by their identity and the usefulness in trading. Each data tracks each feature of exchanges and  put together they cover multiple aspects and capture movements in exchange relatively precisely.&#x20;

#### If you want to make use of exchange data by figuring out

### 1) How many coins came out from or into the exchange

Checking the flow into the exchange is a great way to keep track of coins that could be sold or to be held in long-term purpose

{% content-ref url="/pages/-MSlVoLc7XKvcbGc8o5q" %}
[Exchange In/Outflow and Netflow](/cryptoquant-metrics/exchange/exchange-in-outflow-and-netflow)
{% endcontent-ref %}

### 2) How many coins are in the exchange

Checking the total reserve in the exchange is a great way to figure out how scarce the coin is in the market (exchange)&#x20;

{% content-ref url="/pages/-MSlW6DEcPtp5wCCn2FK" %}
[Exchange Reserve](/cryptoquant-metrics/exchange/exchange-reserve)
{% endcontent-ref %}

### 3) How many addresses or transactions are active or being made through the exchanges

Checking the active address count or transactions is a great way to figure out how many addresses are participated in the movement in the price and find out the sentiment behind it

{% content-ref url="/pages/-MSlVoBHDMAsuiC\_uKsY" %}
[Exchange Addresses Count](/cryptoquant-metrics/exchange/exchange-addresses-count)
{% endcontent-ref %}

{% content-ref url="/pages/-MSlVnZSKdvCMEBKOMur" %}
[Exchange Transactions Count](/cryptoquant-metrics/exchange/exchange-transactions-count)
{% endcontent-ref %}

It is wise to take a look at each indicator according to the number stated above.

## Points to be aware

CryptoQuant always try to be precise and take immediate actions but addresses that are newly created or not labeled need some time to be corrected.

For example, large amount of bitcoin could be seen to get its way out of the exchange but it could be just an internal wallet change. It gives an impression of an outflow but instead it is just the same bitcoin staying in the same exchange. &#x20;

However, the accuracy of labeling and tracking exchange addresses continues to increase making the flow and indicators in the same way. Also, the heuristic running to label the exchange addresses continues to evolve around time.&#x20;


# Exchange In/Outflow and Netflow

Exchange inflow is defined as the amount of coins deposited into exchange wallets. Exchange outflow is the amount withdrawn from exchange wallets. Exchange Inflow - Outflow = Netflow.

## Definition

**Exchange Inflow** is defined as the amount of coins deposited into the crypto exchange wallets.

| Inflow Total     | The total amount of BTC transferred to the exchange.          |
| ---------------- | ------------------------------------------------------------- |
| Inflow Mean      | The mean amount of BTC per transaction sent to the exchange.  |
| Inflow Mean(MA7) | The 7 days moving average of mean BTC inflow to the exchange. |

**Exchange Outflow** is defined as an amount of coin withdrawal from the exchange wallets.

| Metrics           | Description                                                      |
| ----------------- | ---------------------------------------------------------------- |
| Outflow Total     | The total amount of BTC transferred from the exchange.           |
| Outflow Mean      | The mean amount of BTC per transaction sent from the exchange.   |
| Outflow Mean(MA7) | The 7 days moving average of mean BTC outflow from the exchange. |

**Exchange Netflow** is the difference between BTC flowing into and out of the exchange. (Inflow - Outflow = Netflow).

$$
\text{Inflow} - \text{Outflow} = \text{Netflow}
$$

The mean value is the In/Outflow Total divided by the Transactions Count In/Outflow.

$$
\frac{\text{Inflow + Outflow}}{\text{Transactions Count}}
$$

## Interpretation

<figure><img src="https://images.surferseo.art/890249e5-461d-4a0a-80c2-084263cc185f.png" alt="CryptoQuant Exchange In/Outflow and Netflow Section"><figcaption></figcaption></figure>

### By Value Itself

* **The increase in inflows** to exchanges is mostly a **Bearish** sign.
* **The increase in outflows** from exchanges is mostly a **Bullish** sign.

### By Examining Trend

* **Increasing inflow/outflow** indicates **possible volatility** and **helps predict market trends.**

## Explanation

### About Inflows

Considering the fact that moving coins costs fees, wallets from outside exchanges send their coins to crypto exchanges for three possible reasons.

#### **1) To Sell their Coins - Bearish**

In the case of inflow to spot exchange, investors are likely sending Bitcoin (BTC) for selling. This action includes retail buyers' coins moving into the exchange but also the result of custody services provided by institutional buyers. Instead of storing them in cold storage, they move them into other services, such as exchange wallets. This indicates the urge to turn coins into fiat assets or stablecoins.

This reason of action mostly leads to the price drop which indicates a bearish sign.

#### **2) To Trade in the Derivative Market - Volatility Risk**

The purpose for sending coins to derivative market wallets indicates that more trades will be happening on the derivative market. This could possibly lead to increased volatility risk as a result of increased trading activity, investors looking to take profits, and/or to rebalance to de-risk their investment portfolios. This type of action has difficulty in deciding the effect on price since coins in the derivative market could be used to open both long/short positions.

Instead, it should be interpreted as increased volatility risk.

#### **3) To Use services in Crypto Exchanges - Neutral**

Sometimes, investors send their coins to exchange for the purposes of staking, airdrop, and to fit the requirement for IEO. In this case, there is no indication to infer on both price or volatility. However, please note that in the case of an airdrop, indicators such as funding rate and open interest should be considered due to price hedge motivation.

This reason of action should be interpreted as neutral.

### About Outflow

Considering the fact that moving coins cost fees, Bitcoin wallets outside from exchanges send their coins from the exchanges for two possible scenarios.

#### **1) Moving coins after the purchase- Bullish**

In the case of outflow from the spot exchange, these metrics show that investors are likely sending BTC outside for storage. Instead of letting their coins sit in the exchange wallets, investors are pulling out their coins from exchange to hold their coins for security and long-term hold. This action includes retail buyers and holders' coins moving out of the exchange but also the result of custody services provided by institutional buyers.

This reason of action mostly leads to the price rise which indicates a bullish sign.

#### **2) Moving coins that are no longer needed for derivative trades**

The purpose for sending coins from derivative market wallets indicates that fewer trades will be happening on the derivative market. This could be the result of trading activity where investors take profits or rebalance to de-risk their investment portfolios.

### Inflow vs. Outflow

When Bitcoin/liquidity inflows into exchanges, these metrics often signal an intent to sell or engage in dynamic trading activities. Conversely, when coins make their way out of exchange wallets, it signifies a more optimistic outlook. Investors withdrawing coins are essentially expressing confidence in Bitcoin's long-term potential, akin to holding onto prized assets. This nuanced understanding of inflows and outflows provides a valuable compass for interpreting investor sentiment.

## By Examining Trend in Values

### Indicating the Level of Exchange Activity

A positive trend of inflows or outflow to centralized exchanges can indicate an increase in overall exchange activity, meaning more and more users actively use the exchange for trading. This possibly means that the sentiment of traders is in the **bullish moment**. According to this interpretation, the other way around means **bearish sentiment**.

### Predicting Volatility

Bitcoin In/Outflow Mean(MA7) explain the strength of previous **volatility** in price, which possibly means the current position might be local tops or bottoms. This is because a portion of large inflows is based on transactions among exchanges, where the analysis is done by the CryptoQuant research team, and this phenomenon can be explained by the results of arbitrage strategies.

### Predicting Market Trend (Bullish or Bearish)

Based on the "Exchange Activity" interpretation, we can see the trend of inflow to all exchanges and outflow of liquidity from all exchanges by applying a moving average to data, which is one of the well-known technical indicators for having data's historical trend. We also apply multiple moving averages to see exact inflection points, called [moving average ribbon](https://www.investopedia.com/terms/m/movingaverageribbon.asp).

As you can see below, both inflow and outflow trends roughly well-explain bullish or bearish sentiments for the past 3 years where a stable and meaningful number of exchanges have been activated, which supports the "Exchange Activity" interpretation.

<figure><img src="/files/-MCvk0XNID7vEejLW3Gv" alt="Chart – Inflow to all Exchanges – Source: CryptoQuant"><figcaption></figcaption></figure>

<figure><img src="/files/-MCvk6FHiRMdzVWUyr1J" alt="Chart – Outflow to all Exchanges – Source: CryptoQuant"><figcaption></figcaption></figure>

###

## Predicting Volatility with Bticoin (BTC) Inflow/Outflow Mean(MA7)

By looking at Bitcoin (BTC) Inflow Mean (MA7)'s degree of where local tops are located, we can estimate how much the current location is a local top (in red circle) or bottom (in green circle). If your BTC Inflow Mean (MA7) value is in a similar position, you need to check other complementary indicators telling you selling or buying pressure to determine the current price position is in the local top or bottom.

![](/files/-MCvg3it-a6BDk_eU4bJ)

By looking at Bitcoin Outflow Mean's (MA7's) degree of where local tops are located, we can estimate how much the current location is a local top (in red circle) or bottom (in green circle). If your BTC Outflow Mean (MA7) value is in a similar position, you need to check other complementary indicators telling you selling or buying pressure to determine the current price position is in the local top or bottom.

<figure><img src="/files/-MCvgBwegatV3J8l2rWv" alt="Chart – Outflow MA7 – Source: CryptoQuant"><figcaption></figcaption></figure>

## Link to Our Data

* [BTC: Exchange In/Outflow & Netflow in CryptoQuant Live Chart](https://cryptoquant.com/overview/btc-exchange-flows)
* [ETH: Exchange In/Outflow & Netflow in CryptoQuant Live Chart](https://cryptoquant.com/asset/eth/chart/exchange-flows)
* [Altcoins: Exchange In/Outflow & Netflow in CryptoQuant Live Chart](https://cryptoquant.com/asset/link/chart/exchange-flows)
* [BTC: Exchange In/Outflow & Netflow in CryptoQuant Data API docs](https://cryptoquant.com/docs#tag/BTC-Exchange-Flows)


# Exchange Reserve

The total amount of coins held in the exchange addresses.

## Definition

Exchange Reserve refers to the overall quantity of coins or cryptocurrencies, like Bitcoin, stored in the wallets or addresses controlled by a particular exchange. It represents the total holdings that the exchange has available for various purposes, such as facilitating trades, withdrawals, and managing user balances.

## Interpretation

Understanding the dynamics of exchange reserves involves recognizing its role as a key metric in determining the availability of coins for potential sale within the market. The exchange reserves serve as an aggregated measure, reflecting the total quantity of coins held by the exchange and poised for potential transactions.

Exchange Reserve is the accumulated result of [Exchange In/Outflow & Netflow](/cryptoquant-metrics/exchange/exchange-in-outflow-and-netflow) which naturally follows the indications that in/outflow has. Similar to Exchange NetFlow's interpretation, an increasing trend in netflow indicates the selling pressure and the decreasing trend indicates the buying pressure.&#x20;

Much like the interpretation of Exchange NetFlow, which tracks the net movement of assets into or out of an exchange, Exchange Reserves provides insights into market dynamics. An upward trend in the exchange reserves typically suggests an increasing selling pressure, indicating that more coins from the exchange's holdings are potentially entering the market for sale. Conversely, a downward trend in the exchange reserves points towards decreasing selling pressure, implying that fewer coins are available for sale.

In essence, the interpretation of the exchange reserves, coupled with insights from related metrics like Exchange NetFlow, aids analysts and market participants in gauging the overall sentiment and potential market direction of currencies based on the exchange's coin holdings and their movement patterns.

However, instead of Exchange In/Outflow & Netflow indicating the specific moment or period, Exchange Reserves makes it **easy to track the result of the entire period's movements.**&#x20;

## By Value Itself

The exchange reserve is a valuable metric that provides **insights into the** **level of accumulated selling pressure within an exchange**. By analyzing exchange reserves, market participants can gain a clearer understanding of the dynamics influencing the supply of coins available for trading.

### **High Selling Pressure**

<figure><img src="https://images.surferseo.art/7d82b2b3-cbb6-4ab7-9637-7434d8d62011.png" alt="Bitcoin Exchange Reserves – Higher Selling Pressure"><figcaption></figcaption></figure>

In scenarios where the exchange reserves are high, it signifies an elevated level of selling pressure in the market. This occurs when a substantial number of coins are held within the exchange's addresses, awaiting potential trades. Essentially, market participants are opting to keep a large portion of their holdings within the exchange, suggesting a readiness to sell. The **increased exchange reserve serves as an indicator that a significant volume of coins is available for trading**, potentially leading to a higher supply in the market.

#### **Example**

If a cryptocurrency exchange reports a substantial increase in its reserve, such as a spike from 10,000 to 50,000 Bitcoin over a short period, it implies to the markets that a considerable number of users have deposited coins into the exchange, signaling a heightened selling sentiment among traders.

### **Low Selling Pressure**

<figure><img src="https://images.surferseo.art/74c77750-ed96-49a4-be03-b406548b873e.png" alt="Bitcoin Exchange Reserves – Low Selling Pressure"><figcaption></figcaption></figure>

Conversely, a low exchange reserve indicates diminished selling pressure. In such instances, a smaller number of coins are held within centralized exchanges, awaiting potential trade transactions. This suggests that **market participants are more inclined to withdraw their coins from the exchange for purposes other than immediate selling**, leading to a reduced supply available for trading.

#### **Example**

Suppose a cryptocurrency exchange experiences a decline in its reserve, dropping from 30,000 to 5,000 Bitcoin. This decline in reserve currency signifies to the markets that a smaller number of users are keeping their coins within the exchange, implying a lower selling sentiment and a potential shift towards other activities like becoming long-term holders or making external transfers.

## By Examining Trend

Examining the trend of centralized exchanges and even decentralized exchange reserves is a pivotal aspect of financial analysis, providing insights into the dynamics of deposits, asset availability, and strategic practices of companies within the market. This examination is essential for risk management, assessing liabilities, and gauging potential profit in response to fluctuations in supply and demand.

### **Changing Status in Scarcity**

Delving deeper into the changing status of scarcity, the trend in exchange reserves is a critical indicator for financial analysts. It involves the careful evaluation of deposits, the supply of assets, and the financial companies' practices to navigate through different economic regimes and countries.

### **Increasing Trend: Decreasing Scarcity - Bearish**

Witnessing an increasing trend in exchange reserves often suggests a decrease in currency scarcity, a phenomenon that aligns with bearish market sentiment. In this scenario, financial companies may be opting to deposit more coins into the exchange, responding to a perceived decrease in risk and potentially lowering overall market power.

#### **Example**

A surge in exchange reserves from 20,000 to 50,000 Bitcoin during, for example, March, due to the spot Bitcoin ETF getting rejected, may be indicative of a strategic response to a decrease in perceived risk, a practice observed by many financial companies.

### **Decreasing Trend: Increasing Scarcity - Bullish**

Conversely, a decreasing trend in exchange reserves signals an increasing scarcity of coins, an occurrence typically associated with bullish market movements. This trend signifies a preference for asset accumulation among market participants, reflecting a shift in supply-demand dynamics and a potential increase in market power.

#### **Example**

If exchange reserves decrease from 30,000 to 10,000 Bitcoin due to the spot Bitcoin ETF approval, it may suggest a bullish sentiment as financial companies and traders seek to accumulate assets, and become long-term holders amid decreasing Bitcoin scarcity.

## Final Notes

In conclusion, the role of Bitcoin exchange reserves extends far beyond numerical values on a balance sheet. It serves as a compass, guiding investors through the ever-shifting landscape of cryptocurrency markets. By interpreting trends, understanding selling pressure, and analyzing changing scarcity dynamics, market participants can navigate strategic decisions with confidence. The insights drawn from exchange reserves not only shape investment strategies but also offer a glimpse into the collective sentiment of market participants. In a landscape marked by constant evolution, the scrutiny of exchange reserves emerges as a key practice for those seeking to master the art of strategic cryptocurrency investment.

## Links to Our Data

* [BTC: Exchange Reserve in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/exchange-flows/exchange-reserve?exchange=all_exchange\&window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)
* [ETH: Exchange Reserve in CryptoQuant Live Chart](https://cryptoquant.com/asset/eth/chart/exchange-flows/exchange-reserve?exchange=all_exchange\&window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)
* [Altcoins: Exchange Reserve in CryptoQuant Live Chart](https://cryptoquant.com/asset/link/chart/exchange-flows)
* [BTC: Exchange Reserve in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/BTCgetReserve)


# Exchange to Exchange

The total amount of coins transferred from exchange to other exchange wallets.

## Definition

The total amount of coins transferred from one cryptocurrency exchange to another exchange's digital wallet represents the cumulative volume of digital assets moved between different trading platforms. This metric provides insights into liquidity patterns, asset distribution, and capital movements within the cryptocurrency market, aiding in informed decision-making based on market trends.

| Metrics                 | Description                                                                      |
| ----------------------- | -------------------------------------------------------------------------------- |
| Flow Total              | The total amount of BTC transferred from the exchange to other exchange wallets. |
| Flow Mean               | The mean amount of BTC transferred from the exchange to other exchange wallets.  |
| Transactions Count Flow | The number of transactions from exchange to other exchange wallets.              |

The mean value is the Flow Total divided by the Transactions Count Flow. Data entries were collected from the first transaction between two entities.

## **Significance of Crypto Exchange-to-Exchange Transfers**

<figure><img src="https://images.surferseo.art/1d225844-a06e-4e12-aa01-9ad2c378f9cc.png" alt="Inter Entity Flows: CryptoQuant Platform"><figcaption></figcaption></figure>

In the dynamic crypto market, the movement of digital assets between various exchanges holds paramount significance. As cryptocurrencies gain widespread acceptance, understanding the seamless transfer of assets across cryptocurrency exchanges becomes crucial for comprehending market dynamics. Whether through centralized exchanges known for convenience or decentralized exchanges offering enhanced security and low fees, the significance of exchange-to-exchange transfers lies in their contribution to overall liquidity, market volume, and participant interactions.

### **Analyzing Flow Total**

<figure><img src="https://images.surferseo.art/b6790c79-5144-4094-b107-cd93bd2f299e.png" alt="Bitcoin Exchange to Exchange Flow (Total) - All Exchanges, Spot Exchanges. CryptoQuant"><figcaption></figcaption></figure>

The "Flow Total" metric plays a pivotal role in unraveling the intricacies of the crypto market. It encapsulates the total amount of digital currencies transferred between crypto exchanges, providing a bird's-eye view of transactional activities. By delving into the Flow Total, market participants gain valuable insights into liquidity trends, transactional volume patterns, and potential market shifts, empowering them to make informed decisions regarding the buying and selling of cryptocurrencies.

### **Understanding Flow Mean**

<figure><img src="https://images.surferseo.art/669359e7-7d1e-4dec-8cb8-163a4dbbaabd.png" alt="Bitcoin: Exchange to Exchange Flow (Mean) - All Exchanges, Spot Exchanges. CryptoQyant"><figcaption></figcaption></figure>

Comprehending the "Flow Mean" adds an additional layer of insight to the analysis of crypto exchange-to-exchange transfers. This metric, representing the mean amount of cryptocurrencies moved between exchanges, unveils patterns and anomalies in trading behavior.

Investors and traders can leverage this understanding to discern market trends, adapt strategies, and capitalize on opportunities, contributing to a more nuanced approach in navigating the crypto market.

### **Transactions Count Flow and Its Role in Crypto Exchanges**

<figure><img src="https://images.surferseo.art/f6bffcbe-3a69-41f6-ae4b-32b905dac8a7.png" alt="Bitcoin: Exchange to Exchange Transactions - All Exchanges, Spot Exchanges. CryptoQuant."><figcaption></figcaption></figure>

The "Transactions Count Flow" metric holds a key role in supplementing the analysis of cryptocurrency exchange-to-exchange transfers. Beyond just amounts, this metric provides essential information on the frequency of transactions between crypto exchanges. This nuanced view enhances the overall comprehension of market dynamics, aiding market participants in gauging the intensity and frequency of exchange interactions. Whether engaging with decentralized or centralized exchange, investors can utilize this metric for strategic decision-making, adding a valuable layer to their market analysis toolkit.

## Link to Our Data

* [Exchange to Exchange in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/inter-entity-flows)
* [Exchange to Exchange in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/BTCgetExchangeToExchange)


# Exchange Addresses Count

The number of unique addresses making inflow/outflow transactions of exchanges.

## Definition

The number of unique addresses making inflow/outflow transactions of exchanges.

| Metrics                 | Description                                                                      |
| ----------------------- | -------------------------------------------------------------------------------- |
| Addresses Count Inflow  | The number of the token addresses making inflow transactions to the exchange.    |
| Addresses Count Outflow | The number of the token addresses making outflow transactions from the exchange. |

## Interpretation

Considering that it costs fees to send from wallets to different number of wallets, active exchange address count indicates the **closest meaning to the number of investors** that are involved in exchange related transactions.

This naturally leads to possible interpretation of correlating exchange address count to the level of attention of trading investors.

### By value itself <a href="#interpretation" id="interpretation"></a>

It shows whether **few or large numbers of investors** are involved in transaction.

* **High** : **Large number of investors** are accountable for [Exchange In/Outflow & Netflow](broken://pages/tO93FR17ZpWTRanOCs5r)
* **Low** : **Small number of investors** are accountable for [Exchange In/Outflow & Netflow](broken://pages/tO93FR17ZpWTRanOCs5r)

### By examining trend  <a href="#use-case" id="use-case"></a>

It shows the **level of Exchange Activeness & Volatility**

* **Increasing trend** : **expanding interest and activeness**

  More people are participating in exchange flows indicating expanding interest and activeness of exchange trading leading to possible volatility
* **Decreasing trend** : **diminishing interest and activeness**

  Less people are participating in exchange flows indicating diminishing interest and activeness of exchange trading leading to possible decreasing volatility

## Link to Our Data

* [BTC: Exchange Addresses Count in CryptoQuant Live Chart ](https://cryptoquant.com/asset/btc/chart/addresses)
* [ETH: Exchange Addresses Count in CryptoQuant Live Chart ](https://cryptoquant.com/asset/eth/chart/addresses)
* [BTC: Exchange Addresses Count in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/BTCgetAddressesCountEF)


# Exchange Transactions Count

The total number of deposits/withdrawals transactions of the exchange.

## Definition

The total number of deposits/withdrawals transactions of the exchange.

| Metrics                    | Description                                        |
| -------------------------- | -------------------------------------------------- |
| Transactions Count Inflow  | The total number of deposits to the exchange.      |
| Transactions Count Outflow | The total number of withdrawals from the exchange. |

## Interpretation

Considering that it costs fees to make multiple transactions, the active exchange transaction count indicates the **closest meaning to the number of investors** that are involved in a network transaction.

This naturally leads to possible interpretation of correlating exchange transactions count to the level of attention of trading investors.

### By value itself <a href="#interpretation" id="interpretation"></a>

It shows whether **few or large numbers of transactions** are involved in netflows.

* **High** : **Large** number of transactions are accountable for [Exchange In/Outflow & Netflow](broken://pages/tO93FR17ZpWTRanOCs5r)
* **Low**  : **Small** number of transactions are accountable for [Exchange In/Outflow & Netflow](broken://pages/tO93FR17ZpWTRanOCs5r)

### By examining trend  <a href="#use-case" id="use-case"></a>

It shows the **level of Exchange Activeness & Volatility**

* **Increasing trend** : **Expanding interest and activeness**

  More people are participating in exchange flows indicating expanding interest and activeness of exchange trading leading to possible volatility
* **Decreasing** **trend** : **Diminishing interest and activeness**

  Less people are participating in exchange flows indicating diminishing interest and activeness of exchange trading leading to possible decreasing volatility

## Link to Our Data

* [BTC: Exchange Transactions Count in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/transactions)
* [ETH: Exchange Transactions Count in CryptoQuant Live Chart](https://cryptoquant.com/asset/eth/chart/transactions)
* [BTC: Exchange Transactions Count in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/BTCgetTransactionsCountEF)


# Fund Flow Ratio

The total BTC amount flowing into or out of exchange divided by the total BTC amount transferred on the whole Bitcoin network.

## Definition

The Fund Flow Ratio is a crucial metric in crypto, calculated by dividing the total amount of Bitcoin (BTC) flowing into or out of exchanges by the overall BTC amount transferred across the entire Bitcoin network. This ratio serves as a comprehensive indicator, providing insights into the relative movement of BTC between exchanges and the broader network, helping analysts assess the dynamics of funds in and out of trading platforms in relation to the overall Bitcoin ecosystem.

$$
\text{Fund Flow Ratio} = \frac{\text{Total Exchange Inflows + Outflows in BTC}}{\text{Total Transferred BTC (whole network)}}
$$

## Interpretation

<figure><img src="https://images.surferseo.art/b41503c4-d094-403b-8603-63f361605d3e.png" alt="Bitcoin: Fund Flow Ratio - All Exchanges"><figcaption></figcaption></figure>

The Fund Flow Ratio serves as a quantitative measure, shedding light on the proportion of bitcoins held by exchanges in comparison to the total bitcoins circulating within the broader Bitcoin network.

* High Values: Investors are **actively using the exchanges**
* Low Values: Investing **activities in exchanges at low rates**

When the Fund Flow Ratio registers high values, it indicates a scenario where investors are actively utilizing exchanges, suggesting heightened engagement and trading activities within these platforms. Conversely, low values in the Fund Flow Ratio signify that investors are employing exchanges at lower rates, possibly indicating subdued trading activity or a preference for alternative avenues for managing their bitcoins.

This metric not only reflects the fund flow data dynamics within exchanges but also provides valuable insights into investor sentiment and behavior. By examining the Fund Flow Ratio alongside other fundamental indicators such as net fund flow, flow statement, positive and negative fund flow, analysts can gain a comprehensive understanding of investor preferences and activities in the cryptocurrency market. This nuanced analysis allows for a more informed assessment of the underlying assets, helping discern trends in investor behavior and market dynamics.

### Increase in Fund Flow

An upswing in the Fund Flow Ratio holds significant implications for the cryptocurrency market, offering key insights into the heightened activity and dynamics within exchanges. This increase, indicative of a surge in transactions involving Bitcoins, can be interpreted through two distinct perspectives:

#### **Surging Interest and Activity in Bitcoin Trading**

A notable rise in the Fund Flow Ratio suggests an increased enthusiasm and engagement among market participants in Bitcoin trading activities. Traders and investors are actively involved in buying or selling Bitcoins, signifying a heightened interest in capitalizing on market opportunities. This surge in activity may be driven by positive market sentiments, favorable price trends, or emerging opportunities within the cryptocurrency landscape.

#### **Escalation in Selling Pressure or Profit-Taking**

Alternatively, an uptick in the Fund Flow Ratio could indicate a surge in selling pressure, particularly when accompanied by profit-taking strategies. In this scenario, traders and investors may be capitalizing on favorable price movements to realize profits, contributing to the increased flow of Bitcoins within exchanges. The heightened selling pressure might suggest a cautious approach from market participants who are leveraging favorable market conditions to secure gains.

### Decrease in Fund Flow

<figure><img src="https://images.surferseo.art/5f1ce29f-158a-42db-b0b5-b2bd93a01e8a.png" alt="Decrease in Fund Flow Ratio"><figcaption></figcaption></figure>

A decline in the Fund Flow Ratio is a pivotal indicator that sheds light on the transactional activity within cryptocurrency exchanges, specifically the buying or selling of Bitcoins. This reduction in the Fund Flow Ratio holds dual implications, providing valuable insights into market dynamics:

#### **Lower Interest in Bitcoin Trading**

A diminishing Fund Flow Ratio might signify a decline in overall interest and participation in Bitcoin trading. Traders, anticipating a potential drop or stagnant price movement, may opt to reduce their activity on exchanges. This scenario suggests a cautious sentiment prevailing among market participants who may be adopting a wait-and-watch approach, expecting market conditions to evolve before resuming significant trading activities.

#### **Decrease in Selling Pressure by Whales**

Conversely, the decrease in the Fund Flow Ratio could stem from a reduction in selling pressure, particularly influenced by large-scale cryptocurrency holders, such as institutions, often referred to as whales. In this context, a declining Fund Flow Ratio may indicate that whales are choosing to retain their Bitcoin holdings rather than initiating substantial sell-offs. This strategic behavior from whales can be interpreted as a potential bullish signal, suggesting confidence in the market's upward trajectory. The reluctance of significant holders to sell their Bitcoin positions may signify an anticipation of future price appreciation, influencing market sentiment positively.

## By Examining Trend

### **Negative Fund Flow and Investor Sentiment**

The Fund Flow Ratio is a crucial metric that goes beyond a simple net movement analysis, offering insights into investor sentiment and preferences within the financial markets. Negative fund flow, as revealed by fund flow statements, can be indicative of a scenario where investors are withdrawing their assets from exchanges. This outflow might signal a shift in investor sentiment, influencing the cash flows of cryptocurrency exchanges and impacting their financial health.

### **Analyzing Fund Flow Statement: Cryptocurrency Market**

Understanding cash flows is paramount for evaluating the financial health of exchanges. Fund flow refers to the net movement of funds, and examining cash flow statements can unveil the dynamics of how an exchange generates and utilizes its financial assets. The Fund Flow Ratio provides a comprehensive overview, assisting investors in gauging the balance sheet of exchanges and making informed decisions based on these financial indicators.

### **Equity Funds and the Fund Flow Ratio**

Equity funds play a crucial role in influencing the fund flow ratio within cryptocurrency exchanges. By delving into the net fund flow and its correlation with equity funds, investors can better grasp the interplay between financial assets and investor behavior. This analysis can unveil trends in investor sentiment, guiding market participants to navigate the ever-evolving landscape of the cryptocurrency market.

## Links to Our Data

* [Fund Flow Ratio in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/flow-indicator/fund-flow-ratio?exchange=all_exchange\&window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)
* [Fund Flow Ratio in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/BTCgetFundFlowRatio)


# Exchange Supply Ratio

Exchange Supply Ratio is calculated as the exchange reserve divided by the total supply.

## Definition

Exchange Supply Ratio is calculated as the exchange reserve divided by the total supply. The metric measures the ratio of tokens reserved in exchange wallets relative to the total supply of the token.

$$
\text{Exchange Supply Ratio} = \frac{\text{Exchange Reserve}}{\text{Total Supply}}
$$


# Exchange Inflow CDD

This indicator is a noise-removed version of CDD with respect to exchange dumping signal

## Definition

[Coin Days Destroyed (CDD)](https://cryptoquant.com/asset/btc/chart/network-indicator/coin-days-destroyed-cdd) of coins destroyed by flowing into exchanges. High values indicate that more long-term holders moved their coins for the purpose of possible selling. This indicator is a noise-removed version of CDD with respect to exchange dumping signal.

$$
\text{Exchange Inflow CDD}=\sum\_{o \in \text{spent outputs to the exchange}}\text{lifespan}\_o\*\text{value}\_o
$$

## Interpretation

Exchange Inflow CDD is a subset of Coin Days Destroyed (CDD) where coins are destroyed by flowing into exchanges. This indicator is noise-removed version of CDD with respect to exchange dumping signal. Also, note that exchange to exchange inter flow's value was excluded to clear the noise.

Exchange Inflow CDD specifically screens transaction that involved inflow to exchanges' wallets and represent its value as CDD. CDD gives more weight to&#x20;

1\) longer-lived UTXO&#x20;

2\) Amount of UTXO is holding BTC.&#x20;

Weighting more on these makes the indicator sensitive to long-term holders’ movement and show sentiment & behavior.&#x20;

### By value itself <a href="#interpretation" id="interpretation"></a>

* **High**: Long-held coins or great amount of coins or both are moving into the exchange  \
  -**Volatility Risk or Possible Trend Reversal**

A large number of alive days are destroyed which indicates that long-term holders' coins are exposed to selling. It is especially notable that coins that held large alive days or in quantity are moving into exchange, indicating possible sell pressure or trend reversal.&#x20;

* **Low**: Long-held coins are moving in less amount&#x20;

## Link to Our Data

* [Exchange Inflow CDD Live Chart](https://cryptoquant.com/asset/btc/chart/flow-indicator/exchange-inflow-cdd?exchange=all_exchange\&window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)


# Exchange Inflow - Spent Output Age Bands

Exchange Inflow - Spent Output Age Bands is a set of all spent outputs that were created within a specified age band which flowed into exchange wallets.

## &#x20; Definition

Exchange Inflow - Spent Output Age Bands is a set of all spent outputs that were created within a specified age band which flowed into exchange wallets. Each colored band represents the total value of spent outputs that flowed into exchanges, which were last created within the denoted time period. This indicator summarizes the flow of capital into exchanges from long-term and short-term holders in a bundle along with the price actions.

$$
\text{Exchange Inflow - Spent Output Age Bands}=\sum\_{u \in \text{inflow-utxos}\_t} \text{value}\_u \* \mathbb{I}(a\_i \leq \text{lifespan}\_u < b\_i)
$$

$$
\text{Exchange Inflow - Spent Output Age Bands(%)}\frac{\sum\_{u \in \text{inflow-utxos}\_t} \text{value}\_u \* \mathbb{I}(a\_i \leq \text{lifespan}*u < b\_i)}{\sum*{u \in \text{inflow-utxos}*t} \text{value}*{u}} \* 100
$$

$$
\[a\_i, bi) \in \[\[0, 1d), \[1d, 1w), \[1w, 1m), \[1m, 3m), \[3m, 6m), \[6m, 12m), \[12m, 18m), \[18m, 24m)\ \[2y, 3y), \[3y, 5y), \[5y, 7y), \[7y, 10y), \[10y, \inf)
$$

| Metric                                       | Definition                                                                                                                                                         |
| -------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| Exchange Inflow - Spent Output Age Bands     | Each colored band represents the **total value** of spent outputs that flowed into exchanges, which were last created within the denoted time period.              |
| Exchange Inflow - Spent Output Age Bands (%) | Each colored band represents **the ratio of** the total value of spent outputs that flowed into exchanges, which were last created within the denoted time period. |

## Interpretation

<figure><img src="https://images.surferseo.art/08fced55-9c90-41ae-8794-0c935700d81b.png" alt="Bitcoin: Exchange Inflow - Spent Output Age Bands - All Exchanges. CryptoQuant"><figcaption></figcaption></figure>

This indicator summarizes the behavior of long-term and short-term holders along with the price actions. As price rises/falls, it is advised to watch out for values in the Spent Output Age Bands to further gain insights on the market through analyzing its participants.&#x20;

Unlike UTXO Age Bands, Spent Output Age Bands focus on the UTXOs that were destroyed within the set metric window. With the help of Spent Output Age Bands, it is possible to pinpoint which aged UTXOs were destroyed in what amount. Using this knowledge, investors can correlate any price movement or changes in the network with the action of long-term/short-term holders' action.&#x20;

Different from regular Spent Output Age Band, Exchange Inflow - Spent Output Age Bands specifically screens spent output that relates to exchanges' wallets and thus provides powerful insights like below

### 1) Targeting Specific Exchange Inflow's coins' feature (Long-term / Short-term / Cohort's Coins)

If a large inflow happened to Binance's Wallet, taking interpretation from Exchange Inflow - Spent Output Age Bands (Binance) could indicate whether long-term/short-term holders' coins were accountable for most of the inflow. If drastic price movement was made after the inflow, it is reasonable to infer that **" Inflow that happened in the Binance are Long-term/Short-term investors that drove the price to drop/rise."**

### 2) Keep track of only the short-term/long-term coins' exchange inflow

If certain age band's coins were flowed into the exchange, CryptoQuant users can infer their past behavior pattern and take market situation into consideration and act correspondingly.&#x20;

## By value itself

* **High value (Native Value) & Dominance (%)** in certain Spent Output Age Bands\
  \- **Mostly accountable for changes in the network**

### Example

For instance, when examining the UTXO Age Band spanning from 3 years to 5 years, if this specific band exhibits the highest value or dominance within the SOABs, the line represents a crucial insight. It signifies that investors holding assets for a duration of 3 years to 5 years predominantly influence any price movements or changes observed in the market within the specified metric window. This analysis underscores the significance of this particular band, as the line represents the substantial impact of investors within this time frame on market dynamics. Understanding such patterns becomes pivotal in comprehending market trends and potential shifts.

## Link to Our Data

* [Exchange Inflow - Spent Output Age Bands Live Chart](https://cryptoquant.com/asset/btc/chart/flow-indicator/exchange-inflow-spent-output-age-bands?exchange=all_exchange\&window=DAY\&priceScale=linear\&metricScale=linear)
* [Exchange Inflow - Spent Output Age Bands (%) Live Chart](https://cryptoquant.com/asset/btc/chart/flow-indicator/exchange-inflow-spent-output-age-bands-percent?exchange=all_exchange\&window=DAY\&priceScale=linear\&metricScale=linear)


# Exchange Inflow - Spent Output Value Bands

Exchange Inflow - Spent Output Value Bands shows the distribution of all spent outputs flowed into exchange wallets according to its value.

## Definition

Exchange Inflow - Spent Output Value Bands show the distribution of all spent outputs flowed into exchange wallets according to their value. Each colored band represents the total value of spent outcomes that flowed into exchanges that have a value within the denoted range. This indicator can be used to estimate the flow of capital, or how coins moved into exchanges from whale and retail holders.

$$
\text{Exchange Inflow - Spent Output Value Bands}=\sum\_{u \in \text{inflow-utxos}\_t} \text{value}\_u \* \mathbb{I}(a\_i \leq \text{value}\_u < b\_i)
$$

$$
\text{Exchange Inflow - Spent Output Value Bands(%)}=\frac{\sum\_{u \in \text{inflow-utxos}\_t} \text{value}\_u \* \mathbb{I}(a\_i \leq \text{value}*u < b\_i)}{\sum*{u \in \text{inflow-utxos}*t} \text{value}*{u}} \* 100
$$

$$
\[a\_i, bi) \in \[0, 0.01), \[0.01, 0.1), \[0.1, 1), \[1, 10), \[10, 100), \[100, 1k), \[1k, 10k), \[10k, inf)
$$

| Metric                                         | Definition                                                                                                                                             |
| ---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------ |
| Exchange Inflow - Spent Output Value Bands     | Each colored band represents **the total value of** spent outputs that flowed into exchanges, that have a value within the denoted range.              |
| Exchange Inflow - Spent Output Value Bands (%) | Each colored band represents **the ratio of** the total value of spent outputs that flowed into exchanges, that have a value within the denoted range. |

## Interpretation

<figure><img src="https://images.surferseo.art/b81642d2-6441-4f0e-b2f1-8aa66b7bee50.png" alt="Bitcoin: Exchange Inflow - Spent Output Value Bands - All Exchanges. CryptoQuant"><figcaption></figcaption></figure>

This indicator can be used to estimate the number of coins moved by whales and retail holders. As price rises/falls, it is advised to watch out for values in the Spent Output Value Bands to further gain insights on the market through analyzing its participants. Exchange Inflow - Spent Output Value Bands can provide information that is not notified by our alert telegram channel and provide details such as Multiple Whale Possibilities and Aggregated Retail Inflow.

Unlike UTXO Value Bands, Spent Output Value Bands focus on the UTXOs that were destroyed within the set metric window. With the help of Spent Output Value Bands, it is possible to pinpoint which sized UTXOs were destroyed in what amount. Using this knowledge, investors can correlate any price movement or changes in the network with the action of whales/retails' action precisely.

Different from regular Spent Output Value Band, Exchange Inflow - Spent Output Age Bands specifically screen spent output that relates to exchanges' wallets and thus provides powerful insights like those below

### **1) Targeting Specific Exchange Inflow's coins' feature (Whale/Retail)**

For example, if a large inflow happened to Binance's Wallet, taking an interpretation from Exchange Inflow - Spent Output Value Bands (Binance) could indicate whether Whales/Retails' coins were accountable for most of the inflow. If drastic price movement was made after the inflow, it is reasonable to infer that **" Whales/Retails deposited most of the inflow to the Binance and caused the price to drop/rise."**

### **2) Keep track of only the whale/retails' coins' exchange inflow**

One notable application of Exchange Inflow - Spent Output Value Bands lies in its ability to precisely track the movement of whale and retail-held coins specifically within exchange inflows. By focusing solely on the influx of coins associated with whales and retail investors, investors can gain a targeted understanding of market dynamics. This tailored insight is particularly valuable for discerning whether significant price fluctuations following an inflow can be attributed to the strategic actions of whales or retail participants. In essence, this feature enables users to keep a vigilant eye on the exchange inflow of coins held by these key players, offering a nuanced perspective on market behavior.

## By Value Itself

* **High value (Native Value) & Dominance (%)** in certain Spent Output Value Bands - **Mostly accountable for changes in the network**

For example, if the UTXO Value Band of 1k to 10k has the greatest Spent Output Age Bands in terms of value or dominance, it could be interpreted that investors holding at least 1k to 10k are primarily accountable for any price movement or changes that occur in the exchange within a set metric window.

### **Bitcoin: Spent Output Value Bands USD Value Range**

<figure><img src="https://images.surferseo.art/108642d7-1d42-4dac-acfb-76efa78c5423.png" alt="Bitcoin: Spent Output Value Bands USD"><figcaption></figcaption></figure>

The Spent Output Value Bands reveal the distribution of all spent outputs based on their respective values. Each distinct band visually encapsulates the cumulative value of spent outputs falling within the specified USD value range. This metric serves as a valuable tool for gauging the volume of coins in motion, offering insights into the activity of both prominent whales and individual retail holders.

### Links to Our Data

* [Exchange Inflow - Spent Output Value Bands Live Chart](https://cryptoquant.com/asset/btc/chart/flow-indicator/exchange-inflow-spent-output-value-bands?exchange=all_exchange\&window=DAY\&priceScale=linear\&metricScale=linear)
* [Exchange Inflow - Spent Output Value Bands (%) Live Chart](https://cryptoquant.com/asset/btc/chart/flow-indicator/exchange-inflow-spent-output-value-bands-percent?exchange=all_exchange\&window=DAY\&priceScale=linear\&metricScale=linear)


# Miner Flows/Indicators

Entry into Miner flow/indicator

| Data/Indicator                                                                   | Definition                                                                                                                                                                                                                                                                                                                | Interpretation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| -------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Miner**                                                                        | <p>-A miner controls <strong>supply</strong> on the blockchain by mining blocks.</p><p>If mining pools shut down their mining activities for some reason, the network cannot be maintained. </p><p></p><p>-Find out more on <a data-mention href="/pages/-MCu3abmgunFemkWQ0kq">/pages/-MCu3abmgunFemkWQ0kq</a></p><p></p> | -The place where additional newly coined amount is generated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| [Miner Outflow](/cryptoquant-metrics/miner/miner-outflow)                        | The outflow of BTC from mining pool wallets                                                                                                                                                                                                                                                                               | <p></p><ul><li><p><strong>High</strong> </p><p>A lot of miners' coins are exposed to selling    -<strong>Bearish</strong> </p></li><li><p><strong>Low</strong> </p><p>Only a few of miners' coins are exposed to selling- <strong>Bullish</strong>  </p></li><li><strong>Increasing</strong>                  Miners' selling power is increasing- <strong>Bearish</strong></li><li><strong>Decreasing</strong>              Miners' selling power is decreasing - <strong>Bullish</strong></li></ul>                                                                |
| [Miner to Exchange](/cryptoquant-metrics/miner/miner-to-exchange)                | The total amount of coins transferred from mining pool to exchange wallets                                                                                                                                                                                                                                                | <p></p><ul><li><p><strong>High</strong> </p><p> A lot of miners' coins are exposed to selling    -<strong>Bearish</strong> </p></li><li><p><strong>Low</strong> </p><p>Only a few of miners' coins are exposed to selling- <strong>Bullish</strong>  </p></li><li><strong>Increasing</strong>                  Miners' selling power is increasing- <strong>Bearish</strong></li><li><strong>Decreasing</strong>              Miners' selling power is decreasing - <strong>Bullish</strong></li></ul>                                                               |
| [Miners' Position Index (MPI)](/cryptoquant-metrics/miner/miners-position-index) | Defined as the ratio of the number of all miners' outflows in USD divided by 365 days moving average of it.                                                                                                                                                                                                               | <p></p><ul><li><p><strong>High</strong> </p><p>Miners are sending their coins more than usual    - <strong>Bearish</strong>  </p></li><li><p><strong>Low</strong> </p><p>Miners are sending their coins less than usual       - <strong>Bullish</strong>  </p></li><li><strong>Increasing</strong> <strong>:</strong> Miners are being more involved in selling and increasing their sell - <strong>Bearish</strong></li><li><strong>Decreasing</strong> : Miners are being less involved in selling and decreasing their sell  - <strong>Bullish</strong></li></ul> |

## Reason to look for Miner flows/indicator

### Looking into Miner's cost-benefit model with BTC price   <a href="#miners-selling-capitulation" id="miners-selling-capitulation"></a>

The time point for their selling or even buying provides valuable insights generated from miner's perspective.&#x20;

Miners spend their money in mining that comes with electricity or maintenance cost which makes them the only entity that follows a typical business model. They are forcibly required to sell some of their mined BTC to cover the costs. This business structure naturally exposes some of reasons behind miner's behavior. For example,

1\) If they sold their BTC regularly with unusually big amount, it could indicate that Miners are selling at over-valued BTC price.&#x20;

2\) If they start to buy BTC instead of collecting fiats to pay for their costs, it could indicate that BTC is under-valued leading the miners to postpone their selling and trying to benefit from the under-valued BTC price. &#x20;

Thus, looking at the behavior pattern of miners could provide investors with market insight that took cost-benefit model of miners into account

## How to look at indicators

This section identifies the look out point for individual indicators. These indicators could be divided by their identity and the usefulness in trading. Each data tracks each feature of miners and  put together, they cover multiple aspects and capture movements in miners relatively precisely.&#x20;

If you want to make use of exchange data by figuring out

### 1) How many coins came out from miners

Checking the outflow from miners

{% content-ref url="/pages/-MSlWbOivIl1Rk3akTCS" %}
[Miner Outflow](/cryptoquant-metrics/miner/miner-outflow)
{% endcontent-ref %}

### 2) How many coins are withdrawn from miners to the exchange

Checking the flow into the exchange is a great way to keep track of coins that could be sold from miners

{% content-ref url="/pages/-MSReO5hRJfzkC5cWi8U" %}
[Miner to Exchange](/cryptoquant-metrics/miner/miner-to-exchange)
{% endcontent-ref %}

### 3) To look out if most of the miners are selling BTC

Due to covering their cost, it is normal for miners to sell their BTC but if most of miners are selling, it could indicate a future price drop or provide top signal&#x20;

{% content-ref url="/pages/-MCFj\_dMP5mbOVPYHasD" %}
[Miners' Position Index (MPI)](/cryptoquant-metrics/miner/miners-position-index)
{% endcontent-ref %}

It is wise to take a look at each  indicator according to the number stated above.

## Points to be aware

Just like any flow data, all the outflow from miners doesn't indicate immediate selling

Firm belief in correlation to outflow from miner with price drop will not always be correct because there are several reasons miner send their BTC to other address.

1\) Just an internal wallet transfer

2\) Sending their BTC to sell in the future

3\) Possibility of re-sending BTC to their own wallet from exchange

There is also a possibility where miners predicted or wrongfully valued BTC.

Even though miners know the cost to generating BTC, their prediction of future BTC price could be wrong and inferring their movement with future BTC price might be misleading. For example, miner's selling does not necessarily mean a price top and their buys doesn't correlate to bottom price with BTC all the time.&#x20;

&#x20;In addition, there are other factors to consider such as the market competitor relation with new-old miners affecting their unexpected cost and recovering cost time preference might differ from halving to halving or by different with miner pools.


# Miner Outflow

The outflow of Bitcoin from mining pool wallets. We define mining pool wallets in our metrics as all participants in the mining pool including individual miners.

## Definition

Bitcoin miner outflows from mining pool wallets. We define mining pool wallets in our metrics as all participants in the mining pool including individual miners.

| Metrics           | Description                                                            |
| ----------------- | ---------------------------------------------------------------------- |
| Outflow Total     | The total amount of BTC transferred from the miner.                    |
| Outflow Mean      | The mean amount of BTC per transaction sent from the miner.            |
| Outflow Top10     | The total BTC amount of the top 10 transactions outflow from the miner |
| Outflow Mean(MA7) | The 7 days moving average of mean BTC outflow from the miner.          |

The mean value is the Outflow Total divided by the Transactions Count Outflow.

The outflow of BTC from mining pool wallets.&#x20;

We define mining pool wallets in our metrics as all participants in the mining pool including individual miners. Miner Outflow includes Miner sending their coins to the exchanges as well as internal transfers or to other entities.

## Interpretation

### By value itself

* **High**: A lot of miners' coins are exposed to selling, (**Bearish**) Bitcoin's price could go down.
* **Low:** only a few of miners' coins are exposed to selling, (**Bullish**) Bitcoin's price could go up.

#### By examining trend

* **Increased Outflows:** Miners' selling power is increasing - **Bearish**
* **Decreased Outflows**: Miners' selling power is decreasing - **Bullish**

<figure><img src="https://images.surferseo.art/a3891a03-3c4f-483d-970c-065afe0122e7.png" alt="Bitcoin Miner Flows Data: CryptoQuant"><figcaption></figcaption></figure>

## About Bitcoin Miner Outflow

As the [glossary](https://dataguide.cryptoquant.com/miner-flows-indicators/miner-outflow) says, bitcoin miners send their coins outside for various reasons.

<figure><img src="https://images.surferseo.art/fed59b94-c665-4080-b237-efac04143757.png" alt="Bitcoin: Miner Outflow (Total) - All Miners. CryptoQuant"><figcaption></figcaption></figure>

### **Understanding Bitcoin Miner Outflows**

Bitcoin miners play a pivotal role in the cryptocurrency ecosystem, but their activities often influence prices and market dynamics in ways that warrant closer examination. One such aspect is the movement of bitcoins from miners' wallets to external addresses, commonly known as miners' outflow.

**Overview of Miner Outflows**

Miners regularly transfer their coins to external addresses for various reasons, reflecting the dynamic nature of their operations. These outflows can provide valuable insights into market sentiment and crypto price trends.

**Key Scenarios:**

1. **Moving to Exchanges for Possible Selling (Bearish Sign)**\
   When miners transfer their coins to cryptocurrency exchanges, it is typically when indicating an intent to sell. This could be driven by the need to cover operational costs or to capitalize on price fluctuations. Such actions are often interpreted as bearish signals, as increased selling pressure may exert downward pressure on prices.
2. **Internal Wallet Movements (Neutral Sign)**\
   Conversely, transfers between miners' internal wallets, excluding trading activities, carry a more neutral connotation. These movements may be conducted for reasons unrelated to market speculation, such as security enhancements or operational optimizations. While they do not directly impact market sentiment, they underscore the complexities of monitoring miners' activities.
3. **Strategic Hodling by Miners (Bullish Sign)**

   When miners opt to hold onto newly mined bitcoins instead of rushing to sell them, it's a bullish sign. This strategic decision reflects confidence in Bitcoin's long-term value and potential for growth. By reducing immediate selling pressure, miners contribute to a supply shortage, which can drive prices upward. Essentially, miners betting on Bitcoin's future success is a positive indicator for the market that prices may rise.

**Implications and Analysis**

Analyzing miners' outflows over the past few days can provide valuable insights into market dynamics. Large-scale movements, involving tens of thousands of bitcoins, may indicate shifts in the bitcoin miner outflow behavior that could influence less or more liquidity in the market and/or price stability.

**Considering the Halving Effect**

The halving event, which reduces the rate at which new blocks of bitcoins are generated, has historically influenced miner outflows behavior. As rewards diminish, miners may adjust their strategies to optimize profitability, potentially impacting the frequency and magnitude of outflows.

## **Final Words**

In conclusion, monitoring Bitcoin miners' outflows offers a nuanced perspective on market dynamics, reflecting the interplay between mining operations, market sentiment, and price trends. By using miner outflows and understanding the motivations behind these movements and their potential implications, market participants can make more informed decisions in the ever-evolving crypto landscape.

### Links to Our Data

* [Miner Outflow in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/miner-flows)
* [Miner Outflow in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/BTCgetOutflowMF)


# Miner to Exchange

The total amount of coins transferred from mining pool to exchange wallets.

## Definition

The total amount of coins transferred from the mining pool to exchange wallets.

| Metrics                 | Description                                                                 |
| ----------------------- | --------------------------------------------------------------------------- |
| Flow Total              | The total amount of BTC transferred from a mining pool to exchange wallets. |
| Flow Mean               | The mean amount of BTC transferred from a mining pool to exchange wallets.  |
| Transactions Count Flow | The number of transactions from a mining pool to exchange wallets.          |

The mean value is the Flow Total divided by the Transactions Count Flow. Data entries were collected from the first transaction between two entities.

## Interpretation

Identify if mining pool affiliated miners are preparing to sell coins.

Unlike Miner Outflow, it only tracks the movement between Miner and Exchanges.

### By value itself <a href="#interpretation" id="interpretation"></a>

* **High** : A lot of miners' coins are exposed to selling - **Bearish** &#x20;
* **Low :** only a few of miners' coins are exposed to selling - **Bullish** &#x20;

### By examining trend

* **Increasing** **:** Miners' selling power is increasing - **Bearish**
* **Decreasing** : Miners' selling power is decreasing - **Bullish**

## About Miners' Outflow to the exchange

#### Moving to the exchanges for possible selling - Bearish

Moving their coins to the exchanges includes the purposes of selling to cover the cost or to prepare for possible sell. Miner's selling actions include the immediate need to cover the cost or  to gain excess gains by selling at the price they consider to be over-valued. Both cases are correlated to sell action which naturally lead to interpret this reason to the price drop which indicates a bearish sign.

## Link to Our Data

* [Miner to Exchange in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/BTCgetMinerToExchange)


# Miners' Position Index (MPI)

Miners' Position Index (MPI) is defined as the ratio of the number of all miners' outflows in USD divided by 365 days moving average of it.

## Definition

The Miners' Position Index (MPI) metric is a valuable indicator that evaluates the relationship between the amount of Bitcoin (BTC) mined in the past year and its corresponding moving average over the same period.

During bear markets, an increase in the MPI signals a notable trend – miners potentially capitulating and selling their mined Bitcoin at a loss. This phenomenon often occurs at market peaks, serving as a precursor to impending price corrections. Miners, recognizing the need to manage costs and optimize resources, may be prompted to move larger-than-usual amounts of their mined bitcoins during such market conditions.

In bull markets, however, the MPI can reveal a different narrative. As market sentiment shifts, miners may choose to combine rewards from block transactions strategically, aligning with the prevailing bullish trend.

This metric provides a nuanced perspective on miners' behavior, helping market participants gauge the ebb and flow of mined bitcoins against market dynamics, transactional costs, and the overall health of the network. This indicator is inspired by Puell Multiple.

$$
\text{MPI} = \text{365 days moving z-score (Capitulation Index)}
$$

$$
\text{Capitulation Index} = \frac{\text{Total Miner Outflows in USD}}{\text{365 days moving average (Total Miner Outflows in USD)}}
$$

## Interpretation

### By value itself

* **High**: Miners are sending their coins more than usual- **Bearish**
* **Low:** Miners are sending their coins less than usual - **Bullish**

### By Examining Trend

* **Increasing:** Miners are being more involved in selling and increasing their sell - **Bearish**
* **Decreasing**: Miners are being less involved in selling and decreasing their sell - **Bullish**

Unlike Miners outflow, Bitcoin Miners' Position Index (MPI) takes the average behavior of miners into account by using 365 days moving average. Also, MPI explains the relative miner's liquidation behavior compared to the historical average, assuming that most of the outflows from miners are heading to exchanges for selling.

Assuming that miners are good at selling their positions at the right price and time as professional traders, MPI is a good indicator for **timing exit points (selling)** by duplicating their behaviors. This also helps to view miners' profitability along with **Puell Multiple**.

{% content-ref url="/pages/-MCB-rM7tBquTrndAKrQ" %}
[Puell Multiple](/cryptoquant-metrics/network/puell-multiple)
{% endcontent-ref %}

## Use Case

### Spotting Exit Points for Selling: Bitcoin Miners' Position Index (MPI)

Given the interpretation that Bitcoin Miners' Position Index (MPI) helps us to spot selling points, we can benefit from the events where the large MPI values occur.

In this use case, we utilize one of the well-known market technical indicators called [Bollinger-band](https://en.wikipedia.org/wiki/Bollinger_Bands) to detect abnormal MPI values. The below chart illustrates detected spots to exit from the market, selling.

<figure><img src="/files/-MCvXIaXsyQ9Y_KXE5Gd" alt="CryptoQuant: Miners&#x27; Position Index"><figcaption></figcaption></figure>

## Link to Our Data and Dashboard

* [Miners' Position Index in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/flow-indicator/miners-position-index-mpi?window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)
* [Miners' Position Index in CryptoQuant Data API docs](https://cryptoquant.com/docs/#operation/getMPI)
* [Bitcoin Miner Dashboard](https://cryptoquant.com/analytics/dashboard/63064a8d77d099261f5ddfb8)


# Miner Supply Ratio

Miner Supply Ratio is calculated as the miner reserve divided by the total supply.

## Definition

Miner Supply Ratio is calculated as the miner reserve divided by the total supply. The metric measures the ratio of tokens reserved in miner wallets relative to the total supply of the token.

$$
\text{Miner  Supply Ratio} = \frac{\text{Miner  Reserve}}{\text{Total Supply}}
$$

### **The Miner's Role in the Ecosystem**

<figure><img src="https://images.surferseo.art/32723f9b-007f-4492-8741-fee9764e9300.png" alt="Bitcoin: Miner Supply Ratio - All Miners. Source: CryptoQuant"><figcaption></figcaption></figure>

To gain a comprehensive understanding of the Miner Supply Ratio, it is imperative to delve into the intricacies of the mining ecosystem. Miners serve as the cornerstone in validating blockchain transactions, ensuring security, and generating new tokens in the process. When miners are rewarded for their efforts, these tokens augment their reserves, invariably influencing the Miner Supply Ratio.

The miner's perspective holds substantial significance, transcending the realms of solving intricate mathematical puzzles. It encapsulates the strategic choices regarding when to vend, retain, or accumulate the cryptocurrency they have earned. These determinations exert a direct impact on the Miner Supply Ratio and, in turn, the broader cryptocurrency market.

### **Historical Trends and Price Implications**

Scrutinizing historical trends in the Miner Supply Ratio can be an enlightening experience. It can unveil patterns and correlations between fluctuations in the ratio and corresponding movements in cryptocurrency prices. For example, a conspicuous escalation in miner reserves often foreshadows an upswing in the cryptocurrency's price as miners anticipate and support its future appreciation.

Conversely, a decline in the Miner Supply Ratio may serve as a bearish indicator. Miners may commence the liquidation of their reserves, triggering selling pressure and resultant price corrections. A profound comprehension of these historical price implications serves as an invaluable resource for traders and investors alike.

### **Comparative Analysis Across Cryptocurrencies**

Conducting a comparative evaluation of Miner Supply Ratios across various cryptocurrencies can yield fascinating insights. Notably, Bitcoin may exhibit a considerably different Miner Supply Ratio in comparison to an alternative cryptocurrency. These disparities are shaped by diverse factors, including block rewards, total supply, and network adoption.

Delving into these distinctions enables us to comprehend why specific cryptocurrencies are more susceptible to price volatility or stability than others. It also offers insights into the strategies of miners who endeavor to accumulate the cryptocurrencies they mine.

### **Wider Market Dynamics**

The Miner Supply Ratio transcends the realms of a niche metric to exert a pivotal role in shaping the broader market dynamics. It imparts influence over liquidity, subsequently impacting price stability. When the Miner Supply Ratio trends upward, liquidity levels often surge, simplifying the process of market entry and exit for traders.

Conversely, a declining Miner Supply Ratio can lead to diminished liquidity levels, typically coinciding with intensified price volatility. Traders vigilantly monitor these trends, recognizing that they frequently present significant trading opportunities.

### **Real-World Implications of Miner Supply Ratio**

In the dynamic world of cryptocurrency, metrics like Miner Supply Ratio transcend theory and exhibit substantial real-world and business implications. Here, we delve into some practical examples where this metric plays a pivotal role in understanding market dynamics and making informed decisions:

#### **Bitcoin's Halving Events**

Bitcoin's periodic halving events, which reduce the rate at which new bitcoins are issued, have a profound impact on its Miner Supply Ratio. As these events unfold, miners typically experience a substantial reduction in the value of their rewards. This leads to a decrease in their reserve of newly minted bitcoins, causing a shift in the Miner Supply Ratio. Observing this shift allows market participants to anticipate how miners may adjust their strategies, potentially influencing Bitcoin's price direction.

#### **Bitcoin's Accumulation Phases**

Historically, Bitcoin has experienced phases of accumulation by long-term investors, often coinciding with a declining Miner Supply Ratio. These accumulation phases suggest that miners and long-term investors are holding onto their BTC reserves, anticipating future price appreciation. As traders and investors identify these periods of reduced Miner Supply Ratios, they may consider them opportune times to accumulate Bitcoin before potential bullish trends.

### **Considerations for Investors**

For investors within the cryptocurrency sphere, a comprehensive grasp of the Miner Supply Ratio is not only advantageous but imperative. This metric facilitates the identification of potential market trends, ranging from imminent price rallies to corrections. Additionally, it offers insights into the long-term health of a cryptocurrency by discerning whether miners are accumulating or divesting their holdings, thereby allowing investors to make well-informed decisions.


# UTxO Data/Indicators

Entry into UTxO data/indicators

| Data/Indicator                                                                               | Definition                                                                                                                                                                                                   | Interpretation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| -------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| [What is a UTxO?](/what-is-cryptoquant/background-knowledge/what-is-a-utxo)                  | It stands for unspent transaction output(UTxO)                                                                                                                                                               | <p>-What is UTxO</p><p>-How UTxOs are created and destroyed</p>                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| [Profit and Loss (UTxO)](/cryptoquant-metrics/utxo/profit-and-loss-utxo)                     | <p>The amount/ratio of UTxOs being in profit or loss </p><p></p><p>-Amount</p><p>The number of UTxOs being in profit/Loss</p><p></p><p>-Profit/Loss Percent</p><p>Ratio of the number of UTxOs being in </p> | <p></p><p></p><ul><li><p>Numbers of UTxOs that are in Profit</p><p><a href="https://cryptoquant.com/overview/btc-network-indicator/16432?window=day">Profit amount</a></p></li><li><p>Numbers of UTxOs that are in Loss</p><p><a href="https://cryptoquant.com/overview/btc-network-indicator/16433?window=day">Loss Amount</a></p></li><li><p>Ratio of UTxOs that are in Profit</p><p><a href="https://cryptoquant.com/overview/btc-network-indicator/16434?window=day">Profit percent</a></p></li><li><p>Ratio of UTxOs that are in Loss</p><p><a href="https://cryptoquant.com/overview/btc-network-indicator/16435?window=day">Loss percent </a></p><p></p></li></ul> |
| [Coin Days Destroyed (CDD)](/cryptoquant-metrics/utxo/coin-days-destroyed-cdd)               | The sum of UTxO's alive days and its value                                                                                                                                                                   | <p></p><ul><li><p>High</p><p>Long-held coins are moving in great amounts - <strong>Bearish</strong></p></li><li><p>Low</p><p>Long-held coins are moving in less amount    - <strong>Bullish</strong></p></li><li><p>Increasing</p><p>Increasing Selling pressure - <strong>Bearish</strong></p></li><li><p>Decreasing</p><p>Decreasing selling pressure - <strong>Bullish</strong></p></li></ul>                                                                                                                                                                                                                                                                          |
| [Mean Coin Age (MCA)](/cryptoquant-metrics/utxo/mean-coin-age-mca)                           | The mean value of products of coin unspent transaction output (UTxO) alive days and its value                                                                                                                | <ul><li><p>Continuous rise</p><p>The total days of coins alive accumulate              - <strong>Bullish</strong></p></li><li><p>Sudden decrease</p><p>Coins that were dormant moved in mass                - <strong>Bearish</strong></p></li></ul>                                                                                                                                                                                                                                                                                                                                                                                                                      |
| [Spent Output Profit Ratio (SOPR)](/cryptoquant-metrics/utxo/spent-output-profit-ratio-sopr) | Spent Output Profit Ratio (SOPR) evaluates the profit ratio of the whole market participants by comparing the value of outputs at the spent time to created time                                             | <p><a data-mention href="/pages/JS7WHMfYk1wIhCA22v1p">/pages/JS7WHMfYk1wIhCA22v1p</a></p><p>Modified SOPR that eliminated noises</p><p></p><p><a data-mention href="/pages/4WgkPhxN3HnQEu7WTHkw">/pages/4WgkPhxN3HnQEu7WTHkw</a></p><p>Modified SOPR that focuses on the behavior of short-term UTxOs.</p><p></p><p><a data-mention href="/pages/OgNjI6y85n2FdLvN9L2O">/pages/OgNjI6y85n2FdLvN9L2O</a></p><p>Modified SOPR that focuses on the behavior of long-term UTxOs.</p>                                                                                                                                                                                           |

## Reason to look for UTxO indicators

### Best for tracking down Long term holders

It is reasonable to assume that long-term holders' bags are "Smart money" and it provides valuable insight for investors to notice their movements if they start to move in anyways. What makes these indicators better is that the longer the bitcoin holder had, the more sensitive indicator is to the movement of the long-lived UTxOs.&#x20;

The longer-lived UTxOs move, the more change in values for these indicators enabling people who use this metric to notice the difference easily. Thus, the best way to capture these "Smart money" movements is through utilizing UTxOs.&#x20;

Also because UTxOs are like traceable cash with the wallet's name on it, it is also possible to  easily trace the record of how long those UTxOs are held. It is best at tracking long held coins but also easy to differentiate investors by age and draw behavior indications from tracking them.&#x20;

## How to look at indicators

This section identifies the lookout point for individual indicators. These indicators could be divided by their identity and their usefulness in trading. Each indicator utilized each feature of UTxOs and  put together they cover multiple aspects and capture movements in UTxO relatively precisely.&#x20;

If you want to make use UTxO's feature of by figuring out

### 1) How many UTxOs itself is in profit or not

Checking the absolute number of UTxO in Profit or loss

{% content-ref url="/pages/-Mi\_M-D7FkB16xY4C9WL" %}
[Profit and Loss (UTxO)](/cryptoquant-metrics/utxo/profit-and-loss-utxo)
{% endcontent-ref %}

### 2) Focusing on figuring out the days of UTxO lived or destroyed

{% content-ref url="/pages/-Mi\_LtJlXw3P-nKBxnhb" %}
[Sum Coin Age (SCA)](/cryptoquant-metrics/utxo/sum-coin-age-sca)
{% endcontent-ref %}

{% content-ref url="/pages/-Mi\_Llz7d8keQpKy4Aw5" %}
[Coin Days Destroyed (CDD)](/cryptoquant-metrics/utxo/coin-days-destroyed-cdd)
{% endcontent-ref %}

### 3) Closer look on whether or not certain kinds of UTxOs were moved in profit or not&#x20;

{% content-ref url="/pages/-Mi\_KteakN6ufOHt\_bJx" %}
[Spent Output Profit Ratio (SOPR)](/cryptoquant-metrics/utxo/spent-output-profit-ratio-sopr)
{% endcontent-ref %}

It is wise to take a look at each indicator according to the number stated above.

## Points to be aware

When the UTxOs are moved, it doesn't necessarily mean that all of them are sold or bought.

Relating any UTxO movement to trade-related actions and applying them to the indicators would not fit the purpose of the creation of these indicators. For instances of internal wallet movement, the UTxO does move, but it does not necessarily have to do with price issues.&#x20;

However, it is important to note that any kind of movement on the chain exposes the wallet to the security cost of sending to a wrongful address, getting into on-chain radar just by moving, and paying fees to have any kind of transaction.

Thus, it is quite reasonable to assume that every transaction has to have a purpose behind it.

<figure><img src="/files/Wsr45WOCz0FqVKb0pvEJ" alt=""><figcaption></figcaption></figure>


# Profit and Loss (UTxO)

The number of UTxOs being in profit or loss by comparing the price between created and destroyed

## Definition

Profit and Loss (UTxO) evaluates the number of UTxOs being in profit or loss by comparing the price between created and destroyed. When the price at destroyed time is higher than created, this transaction is in profit.

$$
\text{UTxOs in Profit} = \text{Number of UTxOs being in profit}
$$

$$
\text{UTxOs in Loss} = \text{Number of UTxOs being in loss}
$$

$$
\text{Percent UTxOs in Profit} = 100 \* \frac{\text{UTxOs in Profit}}{\text{Number of UTxOs}}
$$

$$
\text{Percent UTxOs in Loss} = 100 \* \frac{\text{UTxOs in Loss}}{\text{Number of UTxOs}}
$$

## Interpretation

Assuming that UTxO's movement is the result of trading transaction, Profit and Loss (UTxO) is the basic data that shows how many UTxOs are in loss.

### By Examining Absolute Numbers <a href="#interpretation" id="interpretation"></a>

If you want to look for how **many** UTxOs are in profit/Loss&#x20;

* **Numbers** of UTxOs that are in **Profit**: [Profit amount](https://cryptoquant.com/overview/btc-network-indicator/16432?window=day)

  Profit amount naturally shows a correlation to the price
* **Numbers** of UTxOs that are in **Loss**: [Loss Amount](https://cryptoquant.com/overview/btc-network-indicator/16433?window=day)

  Loss amount naturally shows an inverse correlation to the price

### By Examining Ratio <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

If you want to look for ratio of UTxOs are in profit/Loss comparative to all UTxOs

* **Ratio** of UTxOs that are in **Profit:** [Profit percent](https://cryptoquant.com/overview/btc-network-indicator/16434?window=day)

  Profit percent naturally shows a correlation to the price
* **Ratio** of UTxOs that are in **Loss:** [Loss percent ](https://cryptoquant.com/overview/btc-network-indicator/16435?window=day)

  Loss percent naturally shows an inverse correlation to the price

## Link to Our Data

* [BTC: Profit Amount (UTxO) Live Chart](https://cryptoquant.com/overview/full/16432?window=day)
* [BTC: Loss Amount (UTxO) Live Chart](https://cryptoquant.com/overview/full/16433?window=day)
* [BTC: Profit Percent (UTxO) Live Chart](https://cryptoquant.com/overview/full/16434?window=day)
* [BTC: Loss Amount (UTxO) Live Chart](https://cryptoquant.com/overview/full/16435?window=day)


# Profit and Loss (Supply)

Profit and Loss (Supply) evaluates the sum of UTxOs being in profit or not by comparing the price between created and destroyed

## Definition

Profit and Loss (Supply) evaluates the sum of UTxOs being in profit or not by comparing the price between created and destroyed.&#x20;

$$
\text{Supply in Profit} = \sum\_{u \in utxos} \text{value}\_u \* \mathbb{I}(\text{price}*u > \text{price}*{created, u})
$$

$$
\text{Supply in Loss} = \sum\_{u \in utxos} \text{value}\_u \* \mathbb{I}(\text{price}*u < \text{price}*{created, u})
$$

$$
\text{Percent Supply in Profit} = 100 \* \frac{\text{Supply in Profit}}{\text{Total Supply}}
$$

$$
\text{Percent Supply in Loss} = 100 \* \frac{\text{Supply in Loss}}{\text{Total Supply}}
$$

## Interpretation

These metrics are similar to the ones in Profit and Loss (UTxO) but put more weight on each UTxO with its value. It enables measuring the exact alive bitcoin transaction output value in profit. Profit and Loss (Supply) is calculated as the sum of UTxO value.

* Profit Amount: The sum of UTxO value being in profit by comparing the price between created and destroyed.
* Loss Amount: The sum of UTxO value being in loss by comparing the price between created and destroyed.
* Profit Percent: Ratio of the sum of UTxO value being in profit among the total sum of UTxO value.
* Loss Percent: Ratio of the sum of UTxO value being in loss among total UTxO value.

## Link to Our Data

* [BTC: Profit Amount (Supply) Live Chart](https://cryptoquant.com/overview/full/16436?window=day)
* [BTC: Loss Amount (Supply) Live Chart](https://cryptoquant.com/overview/full/16437?window=day)
* [BTC: Profit Percent (Supply) Live Chart](https://cryptoquant.com/overview/full/16438?window=day)
* [BTC: Loss Amount (Supply) Live Chart](https://cryptoquant.com/overview/full/16439?window=day)


# Coin Days Destroyed (CDD)

When UTxO is destroyed, Coin Days Destroyed (CDD) is calculated as the sum value of the number of days between created and spent multiplied by the UTxO amount.

## Definition

Coin Days evaluates the number of coins that are not being spent, which gives more weight to estimate long-term-holder (LTH) position. When that coin is spent, the coin is considered "destroyed," and is being updated on Coin Days Destroyed (CDD) metric. CDD is the sum of products of spent transaction output alive days and its value.

$$
CDD=\sum\_{o \in \text{spent outputs}}\text{lifespan}\_o\*\text{value}\_o
$$

## Interpretation

### By value itself <a href="#interpretation" id="interpretation"></a>

* **High**: Long-held coins are moving in great amounts - **Volatility Risk or Possible Trend Reversal**

  A large number of alive days are destroyed which indicates that long-term holders' coins are exposed to selling. Since coins held long have a huge impact on the market.
* **Low**: Long-held coins are moving in less amount

### By Examining Trend <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

* **Increasing** trend: **Increasing selling pressure**

  Long term holders' coins are continuously being sold
* **Decreasing** trend: **Decreasing selling pressure**

  Long term holders' coins are slowing down in movement

### Note on Coin Days Destroyed

CDD gives more weight to:

1\) Longer-lived UTXO

2\) Amount of UTXO is holding BTC.

Weighting more on these makes the indicator sensitive to long-term holders' movement and shows sentiment & behavior.

### Explanation on creation and destruction of UTxO(s)

For every coin that has not been spent on that day, it accumulates one "Coin Day." To understand the concept of "Coin Day" better, check the examples below.

* A UTxO for 1 BTC that has not been spent for 10-days has accumulated 10 coin days.
* A UTxO for 0.5 BTC that has not been spent for 100-days has accumulated 50 coin days.
* A UTxO for 8 BTC that has not been spent for 6-hours (1/4 day) has accumulated 2 coin days.

When that coin is spent, the coin is considered "destroyed," and is being updated on CDD metric.

#### **Coin Days Destroyed**

<figure><img src="https://images.surferseo.art/ce02d527-88ff-4098-821f-b99e72476997.png" alt="Bitcoin: Coin Days Destroyed (CDD)"><figcaption></figcaption></figure>

An indicator, Coin Days Destroyed (CDD), offers insights into market participants who have held Bitcoin on-chain for an extended period.

*What it measures:* CDD metric is a measure of the cumulative number of days that a coin has not been moved before it is spent or transferred.

*Why it matters:* Indicates the "age" of a coin before it is used, helping to identify periods of significant coin movement.

#### **Supply Adjusted CDD**

<figure><img src="https://images.surferseo.art/77563ab6-9d5d-442a-a281-c745fb50ea64.png" alt="Bitcoin: Supply-Adjusted CDD"><figcaption></figcaption></figure>

Normalized CDD by supply total.

*What it measures:* The amount of cryptocurrency (coins) moved or spent, adjusted based on the total supply.

*Why it matters:* Helps assess the significance of coin movements relative to the overall available supply.

#### **Average Supply Adjusted Coin Days Destroyed**

<figure><img src="https://images.surferseo.art/1373bb65-58a4-4cbe-bcd8-48e9f46c1eec.png" alt="Bitcoin: Average Supply-Adjusted CDD"><figcaption></figcaption></figure>

Average value of Supply-Adjusted CDD since genesis block.

*What it measures:* The average age of coins destroyed in a transaction, adjusted for the total supply.

*Why it matters:* Gives insight into the average time coins are held before being spent or moved, considering the entire supply.

#### **Binary CDD**

<figure><img src="https://images.surferseo.art/5698d36c-1faa-4aea-a80e-46eff2860190.png" alt="Bitcoin: Binary CDD"><figcaption></figcaption></figure>

Signal whether the current Supply-Adjusted CDD is larger than its average or not.

*What it measures:* Simplifies Coin Days Destroyed into a binary (yes/no) format, adjusted based on the total supply, indicating whether a significant amount of old coins has moved.

*How it works:* Describes whether Supply-Adjusted CDD on any given day was above or below the historical average, offering insights into the activity of long-held coins in the market.

*Why it matters:* Provides a binary indication of whether there are notable long-held coins moving, considering the total supply and historical averages, aiding in understanding market trends.

### **Example Application: Deciphering CDD in Market Trends**

Understanding Coin Days Destroyed (CDD) is like having a magnifying glass for crypto market trends. Let's consider its practical application:

***Context Matters**:* Absolute CDD values need context. Lower values under 5 million days might indicate routine daily traffic. Values above 10 million days could signal bullish markets or turning points, impacting bitcoin days destroyed and investor decisions.

***Volatility Indicator**:* Spikes in CDD, especially exceeding 20 million days, are rare and often align with high volatility. It suggests significant movements of older coins, possibly indicating profit realization or losses and affecting CDD values.

***Market Confidence**:* CDD tends to rise in bullish markets and drop during corrections. A return to lower levels after an elevation might suggest increased confidence among long-period holders, favoring coin dormancy and impacting circulating supply.

***Smart Money Moves**:* CDD gives extra weight to long-held coins, often considered the 'smart money.' Tracking large movements in CDD provides valuable insights into market dynamics, especially during critical price action and considerations of circulating supply.

***Data Smoothness**:* To make sense of the raw blockchain data, using moving averages is common. It helps filter out noise, allowing strategic investors to spot trends more clearly, impacting long-term investors' decisions, and CDD values.

***Strategic Timing**:* Critical spikes in CDD often align with key moments in Bitcoin's price action. Large investors, holding bitcoin for extended periods, tend to make significant moves during these crucial times, influencing bitcoin days destroyed and CDD values.

## Link to Our Data

* [BTC: Coin Days Destroyed Live Chart](https://cryptoquant.com/overview/full/16423?window=day)
* [BTC: Binary Coin Days Destroyed Live Chart](https://cryptoquant.com/overview/full/16426?window=day)
* [BTC: Supply-Adjusted Coin Days Destroyed Live Chart](https://cryptoquant.com/overview/full/16424?window=day)
* [BTC: Average Supply-Adjusted Coin Days Destroyed Live Chart](https://cryptoquant.com/overview/full/16425?window=day)


# Binary CDD

Binary CDD is binary value and if Supply Adjusted Coin Days Destroyed (Supply-Adjusted CDD) is larger than average Supply-Adjusted CDD, Binary Coin Days points to '1' and points to '0'

### Definition: Binary CDD & Supply Adjusted CDD

<figure><img src="https://images.surferseo.art/89dd2931-af3b-4353-9410-0a1d60f5600e.png" alt="Bitcoin: Binary CDD"><figcaption></figcaption></figure>

Binary Coin Days Destroyed is binary value and if Supply Adjusted Coin Days Destroyed is larger than average Supply Adjusted Coin Days Destroyed, Binary Coin Days points to ‘1' and points to ‘0' if not. Let's look into the Binary Coin Days Destroyed (CDD) values:

* **shows 1:** If measured Supply-Adjusted CDD is larger than the average Supply Adjusted CDD
* **shows 0:** If measured Supply-Adjusted CDD is less than the average Supply Adjusted CDD

### Interpretation

It shows whether long-term holders' movements are higher or lower than average CDD.

* **High density** of value pointing ‘1': Long-term holders moved their coins for possible selling
* **Low density** of value pointing '1' : Long-term holders are not moving their coins

### How is Binary CDD Measured?

Binary Coin Days Destroyed (Binary CDD) provides a nuanced perspective by evaluating Supply Adjusted Coin Days Destroyed (Supply-Adjusted CDD) against the historical average. This measurement considers the spending behavior of long-term holders, particularly with older coins, and aims to accurately represent economic activity within a cryptocurrency network. By assessing the CDD indicator in relation to the long-term historical average, Binary CDD gives more weight to extended periods of coin holding, often associated with cold storage or long-term investment strategies. This approach helps identify significant relative movements in on-chain activity, offering insights into market strength and potential smart money actions. The binary assessment serves as a valuable tool for understanding long-term holder behavior, shedding light on shifts in market sentiment and providing a timely indication of potential trends based on historical data and moving averages. coins held.

### Straightforward User Guide

Binary CDD serves as a valuable tool for understanding the patterns and long term holder spending behavior in the cryptocurrency market. Generally, when the market is bullish, LTHs tend to spend their older coins, taking advantage of the market strength and positive trend and resulting in higher-than-average destruction of coin days.

Conversely, during bearish trends, on-chain activity decreases, and off-chain exchange volumes become more dominant. In such periods, long-term investors with old coins, and savvy holders often accumulate inexpensive coins, withdrawing them to cold storage. This results in a reduction of coin days being destroyed compared to the average.

Evaluating Binary CDD is most effective when considering the prevailing market trend. In bullish markets, Binary CDD often remains consistently at 1, reflecting higher on-chain volumes and the spending of older coins. In contrast, bearish markets exhibit a 'bar-code' style pattern in Binary CDD, with alternating 0 and 1 values, showcasing variable on-chain volumes and coin day lifespans, but with a higher proportion of below-average coin day destruction.


# Mean Coin Age (MCA)

Mean Coin Age is the mean value of products of coins unspent transaction output alive days and its value.

## Definition

Mean Coin Age(MCA) is the mean value of products of coin unspent transaction output (UTxO) alive days and its value.

$$
MCA=\frac{\sum\_{u \in \text{unspent outputs}}\text{lifespan}\_u\*\text{value}*u}{\sum*{u \in \text{unspent outputs}}\text{value}\_u}
$$

## Interpretation

MCA is similar to CDD but focuses more on unspent transaction output. Mean Coin Dollar Age is the sum value of products of coin unspent transaction output alive days, value, and the price at the created time.  This indicator enables estimating the Long-Term Holders' portion.

* Mean Coin Age(MCA): MCA is the average age of UTxO. MCA drop implies the massive move of Bitcoin UTxOs that haven't moved for a long time.
* Mean Coin Dollar Age(MCDA): MCDA is an indicator weighted by UTxO created price(USD) to the MCA.

## Link to Our Data

* [BTC: Mean Coin Age Live Chart](https://cryptoquant.com/overview/full/16573?window=day)
* [BTC: Mean Coin Dollar Age Live Chart](https://cryptoquant.com/overview/full/16574?window=day)


# Sum Coin Age (SCA)

Sum Coin Age ( SCA ) is the sum value of products of coins unspent transaction output alive days and its value.

## Definition

Sum Coin Age ( SCA ) is the sum value of products of coins unspent transaction output alive days and its value.

## Interpretation

Sum Coin Age (SCA) is sum of ‘Alive days’ combining the days of all coins that was in a kept single wallet. SCA has a tendency to increase in value in principle because more BTC is being mined and not all BTC move all the time.

* **Sudden decrease**: Coins that were dormant moved in mass- **Volatility Risk or Possible Trend Reversal**
* **Continuous rise**: the total days of coins alive accumulates&#x20;

  Continuous rise in SCA is normal in general but could turn to sell pressure when price begins to rise in sudden.

## Link to Our Data

* [BTC: Sum Coin Age Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/sum-coin-age?window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)
* [BTC: Sum Coin Dollar Age Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/sum-coin-dollar-age?window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)


# Sum Coin Age Distribution (SCA Distribution)

Sum Coin Age Distribution(SCA Distribution) shows the distribution of Long-Term Holder and Short-Term Holder with UTxO data

## Definition

Sum Coin Age Distribution(SCA Distribution) shows the distribution of Long-Term Holder and Short-Term Holder with UTxO data. It is similar to UTxO age distribution but weighted by alive days(=age of each UTxO) to highlight long-term holder's distribution. Each field is calculated as the sum of the products of coin unspent transaction output alive days and its value in a given period, divided by their sum.&#x20;

$$
P(X=\[a\_i, bi))= \frac{\sum\_{u \in utxos} \text{lifespan}\_u \* \text{value}\_u \* \mathbb{I}(a\_i \leq \text{lifespan}*u < b\_i)}{\sum*{u \in utxos} \text{lifespan}*u \* \text{value}*{u}}
$$

$$
\[a\_i, bi) \in \[\[0, 1d), \[1d, 1w), \[1w, 1m), \[1m, 3m), \[3m, 6m), \[6m, 12m), \[12m, 18m), \[18m, 24m)\ \[2y, 3y), \[3y, 5y), \[5y, 7y), \[7y, 10y), \[10y, \inf)
$$

## Interpretation

SCA Distribution is similar to UTxO age distribution but weighted by alive days to highlight long-term holder’s distribution in different ranges. If the long-term SCA Distribution ratio increases, then it could be interpreted as the coin's future value is greater than the current value.

The range of SCA Distribution is as below

* Less than 1 Day
* 1 Day to 1 Week
* 1 Week to 1 Month
* 1 Month to 3 Month
* 3 Month to 6 Month
* 6 Month to 12 Month
* 12 Month to 18 Month
* 18 Month to 24 Month
* 2 Year to 3 Year
* 3 Year to 5 Year
* 5 Year to 7 Year
* 7 Year to 10 Year
* 10 Year to Infinity

## Link to Our Data

* [BTC: Sum Coin Age Distribution Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/sum-coin-age-distribution?window=DAY\&priceScale=linear\&metricScale=linear)
* [BTC: Sum Coin Age Distribution (SCA Distribution) API Docs](https://cryptoquant.com/docs#operation/getSCADistribution)


# Spent Output Profit Ratio (SOPR)

Spent Output Profit Ratio (SOPR) evaluates the profit ratio of the whole market participants by comparing the value of outputs at the spent time to created time.

## Definition

Spent Output Profit Ratio (SOPR) evaluates the profit ratio of the whole market participants by comparing the value of outputs at the spent time to created time. In a simple way, you can estimate the distribution of spent transaction output is in profit or not. SOPR is calculated as the USD value of spent outputs at the spent time (realized value) divided by the USD value of spent outputs at the created time (value at creation). <br>

$$
SOPR=\frac{\sum\_{o \in \text{spent outputs}}  \text{value}*o\*\text{price}*{spent, o}}{\sum\_{o \in \text{spent outputs}}  \text{value}*o\*\text{price}*{created, o}}
$$

## Steps

1\.  UTXO is transferred now

2\.  CryptoQuant locates the USD Value of the spent period and divide them by the  USD Value at the created time&#x20;

Simply put, SOPR = Now value/ Past value

3\. Categorize and put some figures separately by span time to conclude more specific meanings

## How to use SOPR for investment

### By Value itself

<figure><img src="/files/LDoZd3nZxbtAmdLvJVwJ" alt="Spent Output Profit Ratio. Source: CryptoQuant"><figcaption></figcaption></figure>

* **SOPR value greater than 1 ( SOPR > 1 )**

  It implies that the coins moved in a certain timescale are, on average, selling at a profit.
* **SOPR value of exactly 1** **( SOPR =1 )**

  It implies that the coins moved in a certain timescale are, on average, selling coins at break even.
* **SOPR value less than 1 ( SOPR < 1)**

  It implies that the coins moved in a certain timescale are, on average, selling at a loss.

<figure><img src="/files/5hOtFnkbR7h7TyRcFyiK" alt="SOPR Values Below and Above 1"><figcaption></figcaption></figure>

### By Examining Trend

<figure><img src="/files/JfwCkBb7FmSdudMubFEI" alt="SOPR Trending Higher and Lower"><figcaption></figcaption></figure>

* **SOPR Trending Higher** \
  \
  SOPR trending higher implies profits are being realized and coins that were in profit are being transferred to others.\
  Also, it could be implied that investors who sell their coins in profit are increasing their sell or market condition for sellers are getting more profitable.
* **SOPR Trending Lower** \
  

  SOPR trending lower implies losses are being realized and coins that were in loss are being transferred to others.

  Also, it could be implied that investors who sell their coins in loss are increasing their sell or market condition for sellers are getting less profitable.

### **Real-World SOPR Dynamics:** Investing Applied Scenario

As we delve into the practical applications of the Spent Output Profit Ratio (SOPR), We delve into its usefulness in handling diverse market scenarios, capturing the nuanced tale of market sentiment.

#### **Bull Market**

During a bull run, SOPR is a useful tool for profit realization. As prices rise, a larger coin supply turns profitable, enticing long-term holders to capitalize on gains.

* **Resurgence After Correction:** Following a sentiment-driven correction, shrewd investors step in, creating demand that outpaces supply. A low SOPR (near or below 1) signals dormant profits from panic sellers.
* **Strength in Profit Distribution:** When a rally intensifies the drive for profit realization, SOPR can peak successively as supply re-enters at higher profit margins.
* **Local/Macro Top Achieved:** Freshly distributed supply can overwhelm demand, marking local tops or macro market tops. A high SOPR can signify substantial profit realization, considering both the absolute value and fiat value.

#### **Bull Market Corrections**

In bull market corrections, the SOPR indicator can showcase resilience as newer market participants may panic trade, while long-term holders can seize the opportunity to buy the dip.

* **Market Summit Establishment:** Here, distributed supply can establish a market top.
* **Navigating the Correction:** Profitable coins entering the correction can slow SOPR into a downtrend, leading to lower values.
* **Reset:** Capitulation by new investors can result in a low SOPR (near or below 1), while profitable coins remain dormant, indicating conviction and the potential for panic selling.

#### **Bull Market Reversals**

As bull markets transition, SOPR provides insights into changing tides.

* **Elevated Peaks:** This can indicate increasing profit realization, potentially necessitating more capital for coins sold at a higher fiat value.
* **Persistent Profitability Signals:** Once this occurs, it suggests that spending on profitable coins continues during price dips, signaling a sentiment that coins are becoming expensive.
* **Low Values in Correction:** When there is a price correction, it can indicate a broader market panic as investors realize substantial losses.

#### **Bear Market**

In bear markets, SOPR follows a reversal dance.

* **Summit of Supply Over Demand:** Established when supply overwhelms demand, this can potentially lead to high SOPR values.
* **Local Descent in Capitulation:** Investors selling at a loss during local lows can result in very low SOPR values (<1), presenting opportunities for counter-trend traders.
* **Profitable Return Phase:** Once this phase is reached, counter-trend traders or long-term holders can return to profitability, with SOPR potentially trending above 1.
* **Sustained Capitulation Scenario:** As the bear market potentially reaches its final capitulation, SOPR may persist below 1, indicating a period where remaining profitable coins are dormant and potentially leading to a bullish supply squeeze.

## Why are Some Indicators Modified?

<figure><img src="/files/fCe54kDXVYwybw6TFnlw" alt="Modified SOPR Indicators"><figcaption></figcaption></figure>

### 1) Can Less Than an Hour-Long Aged UTXO Mean Significance? (aSOPR)

aSOPR stands for adjusted SOPR( Spent Output Profit Ratio) .&#x20;

It derived from the standard SOPR by excluding UTXOs that has input-output span that are aged less than an hour long.

If there are too many UTXO that are being generated recently, the indicator's value will be made equal to the number of 1 which would mean that many UTXO are at even. &#x20;

{% content-ref url="/pages/JS7WHMfYk1wIhCA22v1p" %}
[aSOPR (Adjusted SOPR)](/cryptoquant-metrics/utxo/spent-output-profit-ratio-sopr/asopr-adjusted-sopr)
{% endcontent-ref %}

### 2) What if Long/Short Aged UTXO Specifically Suffer From Loss? (LTH-SOPR, STH-SOPR)

LTH-SOPR stands for Long Term Holder - SOPR ( Spent Output Profit Ratio).

It derived from the standard SOPR by leaving only the UTXO that are aged more than 155 days.

{% content-ref url="/pages/OgNjI6y85n2FdLvN9L2O" %}
[LTH-SOPR](/cryptoquant-metrics/utxo/spent-output-profit-ratio-sopr/lth-sopr)
{% endcontent-ref %}

STH-SOPR stands for Short Term Holder - SOPR ( Spent Output Profit Ratio).

It derived from the standard SOPR by leaving only the UTXO that are aged less than 155 days and more than an hour alive.&#x20;

{% content-ref url="/pages/4WgkPhxN3HnQEu7WTHkw" %}
[STH-SOPR](/cryptoquant-metrics/utxo/spent-output-profit-ratio-sopr/sth-sopr)
{% endcontent-ref %}

## Links to Our Data

* [BTC: SOPR Live Chart](https://cryptoquant.com/overview/full/16440?window=day)
* [BTC: Adjusted SOPR Live Chart](https://cryptoquant.com/overview/full/16441?window=day)
* [BTC: Short Term Holder SOPR Live Chart](https://cryptoquant.com/overview/full/16443?window=day)
* [BTC: Long Term Holder SOPR Live Chart](https://cryptoquant.com/overview/full/16442?window=day)


# aSOPR (Adjusted SOPR)

Adjusted Spent Output Profit Ratio (aSOPR) is a ratio of spent outputs (lived more than an hour) in profit at the time of the window.

## Definition

The adjusted Spent Output Profit Ratio (aSOPR) is a key metric in cryptocurrency analysis that provides insights into whether people are making a profit when they spend their coins. It takes into account factors like aggregate profit and adjusts for spent coins that may not re-enter circulation. By doing so, it offers a clearer understanding of market behavior. It's like a sophisticated tool that helps us see the cryptocurrency market with greater clarity and accuracy.

## Interpretation

Adjustment was made to SOPR by not accounting for hour less lived coins' movements. This allows excluding noises that are only hour less lived UTXO which has minor implication compared to long lived UTXOs.

As a result, the spectrum of UTXO coverage is **An Hour\<UTXOs age.**

### By Value Itself

* **aSOPR value greater than 1 (aSOPR > 1 )**

  It implies that the coins moved in a certain timescale are, on average, selling at a profit.

  <figure><img src="https://images.surferseo.art/78eab551-9a08-42d5-9f5f-128dbf40d204.png" alt="Bitcoin aSOPR Market Top"><figcaption></figcaption></figure>
* **aSOPR value of exactly 1** **(SOPR =1 )**

  It implies that the coins moved in a certain timescale are, on average, selling coins at break even.
* **aSOPR value less than 1 (SOPR < 1)**

  It implies that the coins moved in a certain timescale are, on average, selling at a loss.

  <figure><img src="https://images.surferseo.art/da364a48-2b10-4432-a6ca-af7dca9800cf.png" alt="Bitcoin aSOPR Market Bottom"><figcaption></figcaption></figure>

### By Examining Trend

* **aSOPR trending higher** implies profits are being realized with potential for previously illiquid supply being returned to liquid circulation
* **aSOPR trending lower** implies losses are being realized and/or profitable coins are not being spent.

### **Adjusted Spent Output Profit Ratio: Investing Applied Scenario**

<figure><img src="https://images.surferseo.art/680c64e3-97c8-47b7-8e54-db8db4d2d276.png" alt="Bitcoin: Adjusted SOPR (aSOPR)"><figcaption></figcaption></figure>

1. Historically, in the middle of bull sentiment, the market correction begins right before the bull run begins and makes aSOPR drop below '1'. This could be the right time to buy before the bull run starts.
2. Previously, in the middle of bear sentiment, the market correction begins right before the bear market starts making aSOPR rise above '1'. This could be the right time to sell before the bear market starts


# STH-SOPR

Short Term Output Profit Ratio (STH-SOPR) is a ratio of spent outputs (alive more than 1 hour and less than 155 days) in profit at the time of the window.

### Definition

Short Term Holder Spent Output Profit Ratio (STH-SOPR) is a ratio of spent outputs (alive more than 1 hour and less than 155 days) in profit at the time of the window.

It is calculated as the USD value of spent outputs at the spent time(realized value) divided by the USD value of spent outputs at the created time(value at creation).

### Interpretation

The adjustment was made by not accounting for an hour less lived and 155 days more lived coins' movements to track short-term investors. This allows excluding long-term investors or coins and only focuses on short-term held movements.

As a result, the spectrum of UTXO coverage is **an hour\<UTXOs age<155 days.**

### By Value itself

<figure><img src="https://images.surferseo.art/7fc327a9-2548-4f62-b202-0723ffc8897c.png" alt="Bitcoin: STH-SOPR "><figcaption></figcaption></figure>

* **STH-SOPR value greater than 1 (STH-SOPR > 1 )**

  It implies that the coins moved in a certain timescale are, on average, **selling at a profit**.
* **STH-SOPR value of exactly 1** **(STH-SOPR =1 )**

  It implies that the coins moved in a certain timescale are, on average, **selling coins at break even**.
* **STH-SOPR value less than 1 (STH-SOPR < 1)**

  It implies that the coins moved in a certain timescale are, on average, **selling at a loss**.

### By examining trend

* **Short-Term Holder SOPR trending higher** It implies that short term investors are realizing their coins where trading condition is getting more profitable. This equals a higher market sentiment.
* **Short-Term Holder SOPR trending lower** It implies that short term investors are realizing their coins where trading condition is getting less profitable. This equals a lower sentiment in the market and one can see the potential of panic selling.


# LTH-SOPR

Long Term Holder Spent Output Profit Ratio (LTH-SOPR) is a ratio of spent outputs (lived more than 155 days) in profit at the time of the window.

### Definition

<figure><img src="https://images.surferseo.art/2767ac94-671e-4804-ae19-6919ee4a7e3a.png" alt="Long Term Holder Spent Output Profit Ratio ( LTH-SOPR)"><figcaption></figcaption></figure>

The Long Term Holder Spent Output Profit Ratio (LTH-SOPR) is a crucial metric used in analyzing market trends and investor behavior, particularly among long-term investors. This ratio provides insights into the behavior of long-term holders by measuring the ratio of spent outputs, which are coins that have been held for more than 155 days, in profit at the time of spending.

By focusing on spent outputs that have lived for an extended period (more than 155 days), the LTH-SOPR value offers valuable information about the profitability of coins held by long-term investors. It is calculated by dividing the USD value of spent outputs at the time of spending (realized value) by the USD value of spent outputs at the time of creation (value at creation). This calculation helps determine whether long-term holders are realizing profits or losses when they sell their coins.

### Interpretation

The adjustment was made by not accounting for 155days less lived coins' movements to track long-term investors. This allows excluding-term investors or coins and only focuses on long term held movements.

**155 days\<UTXOs age.**

Analyzing the LTH-SOPR provides insights into market volatility and long-term investor sentiment. A high LTH-SOPR ratio indicates that long-term holders are selling their coins at a profit, suggesting bullish sentiment and confidence in the market. Conversely, a low LTH-SOPR ratio may indicate that long-term holders are selling their coins at a loss, signaling bearish sentiment and potential market weakness.

Investors and analysts use LTH-SOPR filters to identify trends and patterns in long-term investor behavior. By tracking changes in the LTH-SOPR ratio over time, investors can gauge the overall sentiment of the market and make informed decisions about buying or selling coins.

### By Value itself

Analyzing the Long Term Holder Spent Output Profit Ratio (LTH-SOPR) by value itself and examining trends provides deeper insights into investor behavior and market dynamics.

#### **LTH-SOPR Value Greater than 1 (LTH-SOPR > 1)**

<figure><img src="https://images.surferseo.art/65378eb6-f18a-45e5-8924-c1289f3cdd17.png" alt="Bitcoin: Long Term Holder SOPR. Greater than 1"><figcaption></figcaption></figure>

When the LTH-SOPR value is greater than 1, it indicates that the realized value of spent outputs (profits) exceeds the value of those outputs at creation. This suggests that long-term holders are selling their coins at a profit, which could signify a bullish market sentiment and strong confidence among long-term investors. It may also indicate potential selling pressure from long-term holders looking to capitalize on their profits.

#### **LTH-SOPR Value of Exactly 1 (LTH-SOPR = 1)**

<figure><img src="https://images.surferseo.art/5eb20ec5-71f0-432f-84a7-60085c91a1cf.png" alt="Bitcoin: Long Term Holder SOPR. Equal to 1"><figcaption></figcaption></figure>

When the LTH-SOPR value is exactly 1, it means that the realized value of spent outputs equals the value of those outputs at creation. In other words, long-term holders are neither realizing profits nor incurring losses when selling their coins. This could signal a period of stability in the market, with long-term investors holding onto their positions without actively buying or selling.

#### **LTH-SOPR Value Less than 1 (LTH-SOPR < 1)**

<figure><img src="https://images.surferseo.art/19351999-a190-4681-9f98-aa1223c3f435.png" alt="Bitcoin: Long Term Holder SOPR. Less than 1"><figcaption></figcaption></figure>

When the LTH-SOPR value is less than 1, it suggests that the realized value of spent outputs is lower than the value of those outputs at creation. This indicates that long-term holders are selling their coins at a loss, which may reflect a bearish market sentiment and a lack of confidence among long-term investors. It could also imply that long-term holders are taking losses to exit their positions or to rebalance their portfolios.

### By examining trend

**LTH-SOPR Trending Higher**: When the LTH-SOPR is trending higher over time, it suggests an increasing proportion of spent outputs are realizing profits compared to their creation value. This upward trend may indicate growing bullish sentiment among long-term holders, with more investors selling their coins at a profit. It could signal a strengthening market and potential upward price movement.

**LTH-SOPR Trending Lower**: Conversely, when the LTH-SOPR is trending lower, it implies a decreasing proportion of spent outputs are realizing profits compared to their creation value. This downward trend may suggest mounting selling pressure from long-term holders selling at a loss or a lack of confidence in the market. It could indicate a weakening market and potential downward price movement.

By analyzing the LTH-SOPR both by value itself and by examining trends, investors can gain valuable insights into the sentiment and behavior of long-term holders, helping them make more informed decisions in the cryptocurrency market.


# SOPR Ratio (LTH-SOPR/STH-SOPR)

SOPR Ratio is calculated as long-term holders' SOPR divided by short-term holders' SOPR.

## Definition

LTH/STH SOPR calculates the ratio between the Long-Term Holder Spent Output Profit Ratio and the Short-Term Holder Spent Output Profit Ratio. A higher value of the ratio means a higher spent profit of LTH over STH, which is usually useful for spotting market tops.

$$
\text{SOPR Ratio}=\frac{\text{LTH-SOPR}}{\text{STH-SOPR}}
$$

## Interpretation

During bull markets or periods of rapid price appreciation in Bitcoin’s price, this ratio trends higher, which historically is a good time for market participants to realize a profit. It is calculated as the USD value of spent outputs at the spent time(realized value) divided by the USD value of spent outputs at the created time(value at creation). As a result, the spectrum of UTXO coverage is **155 days\<UTXOs age.**&#x20;

During bear markets or periods of extended weakness, this ratio trends lower as the amount of profit from LTHs relative to STHs declines. Historically, investors have been rewarded when dollar cost averaging into BTC and holding long term when this ratio has been below 1.0 for extended periods of time during bear markets. Firmly reclaiming 1.0 with follow-through higher has led to strong recoveries, and in some cases the start of a new bull market.

### By Value itself

* **SOPR Ratio value greater than 1**

  It implies that more long-term holders are making profits than short-term holders.
* **SOPR Ratio value exactly at 1** **( LTH-SOPR =1 )**

  It implies that short-term holders and long-term holders are making the same profits.
* **SOPR Ratio value less than 1 ( LTH-SOPR < 1)**

  It implies that more short-term holders are making profits than long-term holders.

### By examining trend

* **SOPR Ratio trending higher** implies profits are being realized with potential for previously illiquid supply being returned to liquid circulation
* **SOPR Ratio trending lower** implies losses are being realized and/or profitable coins are not being spent.

*This metric has been proposed by* [*Daniel Joe*](https://twitter.com/DanBTC916?s=20\&t=gVve4aC5BpsecALFs6p88w)*, CQ Verified Author.*


# Net Unrealized Profit/Loss (NUPL)

Net Unrealized Profit and Loss (NUPL) is the difference between market cap and realized cap divided by market cap.

## Definition

Net Unrealized Profit and Loss (NUPL) is the difference between market cap and realized cap divided by market cap.

$$
NUPL = \frac{\text{Market Cap - Realized Cap}}{\text{Market Cap}}
$$

## Interpretation

### By Value Itself

<figure><img src="https://4184086776-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FwY9jt5nY3DeH5c1WCCsW%2Fuploads%2FZCvO47aGKjHcmcJ4YLwG%2Fimage.png?alt=media&#x26;token=bf3dd743-1a14-4e33-8ce3-c8d59466a18a" alt="Net Unrealized Profit and Loss NUPL – Source: CryptoQuant"><figcaption></figcaption></figure>

Assuming that the latest coin movement is the result of a purchase, NUPL (Net Unrealized Profit and Loss) indicates the total amount of profit/loss in all the coins represented as a ratio.

* **Values over ‘0' (+)**: Coins or investors who are in profit are more than investors that are in loss In order for NUPL to be over 0 (+), the Market Cap has to be larger than the Realized Cap. As Market Cap rises above the Realized Cap, it indicates that the value that is being traded on market is greater than the on-chain expected value. For example, if the NUPL value hits 0.75, it means that Market Cap is four times the Realized Cap. It is reasonable to assume that most coins that were moved are on profit and the wide gap between the Realized Cap and Market Cap could act as selling pressure.
* **Values under ‘0' (-)**: Coins or investors who are in loss are more than investors that are in profit In order for NUPL to be under 0 (-), the Market Cap has to be less than the Realized Cap. As Realized Cap exceeds the Market Cap, it indicates that the value that is being traded on market is greater than the on-chain expected value. For example, if the Net Unrealized Profit/Loss value hits -0.5, it means that Market Cap is half the Realized Cap. It is reasonable to assume that most coins that were moved are on loss and the wide gap between the Realized Cap and Market Cap could act as a buying motive.

### By Examining Trend

<figure><img src="https://4184086776-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FwY9jt5nY3DeH5c1WCCsW%2Fuploads%2FQ6RxxPsvlWjFDhCXxiUu%2Fimage.png?alt=media&#x26;token=a28f0ff9-07b9-41b0-b91f-452f8714ee74" alt="Decreasing and Increasing Selling Pressure – Source: CryptoQuant"><figcaption></figcaption></figure>

It shows the **changing profit geography of investors**

* **Increasing trend: Increasing selling pressure**

  More coins or investors are beginning to be in profit and this phase naturally indicates the increasing motive to take profit which leads to an increase in sell pressure. Also, it indicates that Market Cap is exceeding Realized Cap making coins profitable to be sold through the market.
* **Decreasing trend**: **Decreasing selling pressure**

  More coins or investors are beginning to be in loss and this phase naturally indicates the decreasing motive to realize loss which leads to a decrease in sell pressure. Also, it indicates that Realized Cap is exceeding Market Cap making coins less profitable to be sold through the market.

### Investing Applied Scenario

Net Unrealized Profit/Loss (NUPL) stands as a pivotal metric, offering profound insights into the intricate dynamics of Bitcoin investments, reflecting investor sentiment, profit-taking strategies, and strategic decision-making by investors.

When Net Unrealized Profit/Loss (NUPL) surpasses 0.7, a key principle comes into play, signifying proximity to the market top. This principle serves as a guiding force for cautious investors, prompting considerations for Bitcoin investors taking profit. The NUPL value, indicative of a substantial market cap exceeding realized cap, highlights a scenario where investors may strategically take profit, influencing average prices and contributing to increased selling pressure.

Conversely, in a market with a Net Unrealized Profit/Loss (NUPL) of -0.2 or lower, a distinct key principle unfolds, signaling an opportune moment closer to the market bottom. This presents a potential buying opportunity for investors looking to accumulate at perceived undervalued levels. The NUPL value in this scenario suggests that realized cap exceeds market cap, indicating that coins are less profitable to be sold in the market. Strategic investors, recognizing this advantageous condition, may engage in accumulation strategies, influencing average prices with a potential dip.

The interconnectedness of Net Unrealized Profit/Loss with investor sentiment, profit-taking motives, and strategic accumulation underscores the importance of monitoring these factors. In this dynamic strategic investor landscape, the influence of realized value, market value, market trends, Bitcoin price, relative unrealized profit, and relative unrealized loss becomes evident, impacting profit-taking decisions, average prices, and guiding strategic investors as they track Bitcoin price movements.

### **Related Data**

#### **Net Unrealized Profit (NUP)**

Sum of UTxO being in profit with the price difference between created and destroyed.

#### **Net Unrealized Loss (NUL)**

Sum of UTxO being in loss with the price difference between created and destroyed.

#### **Net Unrealized Profit and Loss (NUPL)**

The difference between market value and realized value

## Link to Our Data

* [BTC: Net Unrealized Profit and Loss Live Chart](https://cryptoquant.com/overview/full/16429?window=day)
* [BTC: Net Unrealized Loss Live Chart](https://cryptoquant.com/overview/full/16431?window=day)
* [BTC: Net Unrealized Profit Live Chart](https://cryptoquant.com/overview/full/16430?window=day)


# UTXO Bands (Age)

![](/files/R65LDQ0sLBDSHVDfjZwH)

1. UTXO Age Bands is a set of all active supplies that were last moved within a specified age band.&#x20;
2. Each colored band represents the standards stated below.
3. Because of their categorization by Age Bands, these metrics allow investors to infer market changes by investors' age span as broad as **'Long-term Investors'/'Short-term Investors'** or derive meanings set by **specific age cohort**.&#x20;

## What are the differences between these metrics?

Each colored band represents the standards that are stated below.

### 1) Finding out each age band's 'Total UTXO Amount'

UTXO Age Bands' value that fit according to the age range represents the total value of UTXOs in existence, that was last moved within the denoted time period in native value.&#x20;

{% content-ref url="/pages/WeM8UxadA5XFWoeqbNw5" %}
[UTXO Age Bands](/cryptoquant-metrics/utxo/utxo-bands-age/utxo-age-bands)
{% endcontent-ref %}

### 2)Finding out each age band's 'Realized Cap'

Realized Cap - UTXO Age Bands shows the distribution of realized cap of a specified age band. Each colored band represents the Realized Cap of UTXOs in existence, that was last moved within the denoted time period in USD value

{% content-ref url="/pages/tC1SuE3nAUAKpqMpQPSI" %}
[Realized Cap - UTXO Age Bands](/cryptoquant-metrics/utxo/utxo-bands-age/realized-cap-utxo-age-bands)
{% endcontent-ref %}

### 3)Finding out each age band's 'Number of UTXOs'

UTXO Count - Age Bands shows the number of UTXOs that were last moved within a specified age band. Each colored band represents the number of UTXOs in existence, that were last moved within the denoted time period.&#x20;

{% content-ref url="/pages/M5uOUBFCvk9CjBthmwmO" %}
[UTXO Count - Age Bands](/cryptoquant-metrics/utxo/utxo-bands-age/utxo-count-age-bands)
{% endcontent-ref %}

### 4)Finding out each which age band is responsible for the spent output

Spent Output Age Bands is a set of all spent outputs that were created within a specified age band. Each colored band represents the total value of spent outputs, that were last created within the denoted time period.&#x20;

#### Steps

1\.  CryptoQuant collects UTXOs that was destroyed in a certain window

#### &#x20;                                                               ⬇

2\.  CryptoQuant categorizes them to each band and shows the result by values or by percentage

#### &#x20;                                                               ⬇&#x20;

3\. Investors interpret categorized values and conclude which age band's UTXOs were mostly responsible for any changes in the market.&#x20;

{% content-ref url="/pages/zjiY1hv1YE09TXOjsH7z" %}
[Spent Output Age Bands](/cryptoquant-metrics/utxo/utxo-bands-age/spent-output-age-bands)
{% endcontent-ref %}


# UTXO Age Bands

UTXO Age Bands is a set of all active supply that were last moved within a specified age band.

## Definition

UTXO Age Bands is a set of all active supplies that were last moved within a specified age band. UTXO Age Bands' value that fit according to the age range represents the total value of UTXOs in existence, that were last moved within the denoted time period in native value.&#x20;

$$
\text{UTXO Age Bands} = {\sum\_{u \in utxos} \text{value}\_u \* \mathbb{I}(a\_i \leq \text{lifespan}\_u < b\_i)}
$$

$$
\text{UTXO Age Bands (USD)} =\text{price}*{current}\*{\sum*{u \in utxos} \text{value}\_u \* \mathbb{I}(a\_i \leq \text{lifespan}\_u < b\_i)}
$$

$$
\text{UTXO Age Bands (%)} =\frac{\sum\_{u \in utxos} \text{value}*u \* \mathbb{I}(a\_i \leq \text{lifespan}*u < b\_i)}{\sum*{u \in utxos} \text{value}*{u}}\*100
$$

$$
\[a\_i, bi) \in \[\[0, 1d), \[1d, 1w), \[1w, 1m), \[1m, 3m), \[3m, 6m), \[6m, 12m), \[12m, 18m), \[18m, 24m)\ \[2y, 3y), \[3y, 5y), \[5y, 7y), \[7y, 10y), \[10y, \inf)
$$

#### **Modified Metrics**

| Metric             | Definition                                                                                                                                   |
| ------------------ | -------------------------------------------------------------------------------------------------------------------------------------------- |
| UTXO Age Bands     | Each colored band represents the total value of UTXOs in existence, that were last moved within the denoted time period in **native value**. |
| UTXO Age Bands USD | Each colored band represents the total value of UTXOs in existence, that were last moved within the denoted time period in **USD value**.    |
| UTXO Age Bands (%) | Each colored band represents **the ratio of the total value of UTXOs in existence**, that were last moved within the denoted time period.    |

## Interpretation&#x20;

This indicator summarizes the behaviors of long-term and short-term holders along with the price actions. As price rises/falls, it is advised to watch out for shifting distribution in the UTXO Age Bands to further gain insights on the market through analyzing its participants. \
\
It also provides valuable tools for analyzing static macro views of holders' age distribution in the network and viewing the macro shift in influence difference between Long-held UTXOs and Short-held UTXOs.

Keep in mind that each UTXO Age band is connected to each other. For example, UTXOs that were located in 6m\~12m UTXO Age band six months before shifts to 12m\~18m UTXO Age band now under the assumption that it has not moved.

### By value itself <a href="#interpretation" id="interpretation"></a>

* **High value(Native Value) & Dominance(%) in certain UTXO Age Band**\
  **-** Age Band's type of investor has more representative&#x20;

For example, if the UTXO Age Band of 3 years to 5 years have the greatest UTXO Age Band Value,

1\) It is possible to interpret it as investors that held 3 to 5 years have more potential of influencing the market.&#x20;

2\) The price range bought at the time could indicate an important price level in the market. &#x20;

* &#x20;**Low value(Native Value) & Dominance(%) in certain UTXO Age Band**\
  \- Less influence & type of investor has less representative&#x20;

For example, if the UTXO Age Band of 3 years to 5 years have the least UTXO Age Band Value,

1\) It is possible to interpret it as investors that held 3 to 5 years have less potential of influencing the market than other UTXO Age Band.&#x20;

2\) The price range bought at the time could indicate an important price level but could fall behind compared to other UTXO Age Bands.&#x20;

### By examining trend  <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

* **Longer UTXO Aged Bands Gaining Dominance or Larger in Depth**\
  \- More UTXOs are being held for the Long term = **More HODLing**

As comparatively newer coins are being held or so to speak HODLed without any movement in the network, it moves on to the next UTXO Age Bands implying that more coins are being held in the long term.&#x20;

* **Younger UTXO Aged Bands Gaining Dominance or Larger in Depth**\
  **-** Old Coins Being Renewed to Younger Coins **= Old Coins Being Circulated**

As older coins are being transferred in the network, they are destroyed and become new UTXO making the younger UTXO Age Bands increase in value which results in young UTXO Age Bands growing in size.&#x20;

#### **Note** <a href="#indicating-the-level-of-exchange-activity" id="indicating-the-level-of-exchange-activity"></a>

1. As the circulating supply continues, the total native value of UTXO Age Bands should increase.
2. Identifying the characteristics of UTXOs identical to the wallet/investors might be misleading.\
   ex. One wallet might hold meaningful amounts of both old and young UTXOs in a single wallet.&#x20;

## Link to Our Data

* [UTXO Age Bands Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-age-bands?window=DAY\&priceScale=linear\&metricScale=linear)
* [UTXO Age Bands USD Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-age-bands-usd?window=DAY\&priceScale=linear\&metricScale=linear)
* [UTXO Age Bands (%) Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-age-bands-percent?window=DAY\&priceScale=linear\&metricScale=linear)


# Realized Cap - UTXO Age Bands

Realized Cap - UTXO Age Bands shows the distribution of realized cap of a specified age band

## Definition

Realized Cap - UTXO Age Bands shows the distribution of realized cap of a specified age band. Each colored band represents the Realized Cap of UTXOs in existence, that were last moved within the denoted time period in USD value. Realized Cap is calculated by valuing each UTXO by the price when it was last moved.

$$
\text{Realized Cap - UTXO Age Bands (USD)} ={\sum\_{u \in utxos} \text{value}\_u \* \mathbb{I}(a\_i \leq \text{lifespan}*u < b\_i) \* \text{Price}*{\text{u, at created}}}
$$

$$
\text{Realized Cap - UTXO Age Bands (%)} =\frac{\sum\_{u \in utxos} \text{value}*u \* \mathbb{I}(a\_i \leq \text{lifespan}*u < b\_i) \* \text{Price}*{\text{u, at created}}}{\sum*{u \in utxos} \text{value}*{u} \* \text{Price}*{\text{u, at created}}}\*100
$$

$$
\[a\_i, bi) \in \[\[0, 1d), \[1d, 1w), \[1w, 1m), \[1m, 3m), \[3m, 6m), \[6m, 12m), \[12m, 18m), \[18m, 24m)\ \[2y, 3y), \[3y, 5y), \[5y, 7y), \[7y, 10y), \[10y, \inf)
$$

#### **Modified Metrics**

| Metric                            | Definition                                                                                                                                 |
| --------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ |
| Realized Cap - UTXO Age Bands USD | Each colored band represents the Realized Cap of UTXOs in existence, that were last moved within the denoted time period i**n USD value**. |
| Realized Cap - UTXO Age Bands (%) | Each colored band represents **the ratio of** the Realized Cap of UTXOs in existence, that were last moved within the denoted time period. |

## Interpretation&#x20;

This indicator summarizes the capitalization held by long-term and short-term holders. As price rises/falls, it is advised to watch out for shifting distribution in the UTXO Age Bands to further gain insights on the market through analyzing its participants.&#x20;

Different from UTXO Age Bands indicating UTXO native values or USD value which applies the current same price standard to each band, Realized Cap - UTXO Age Bands (USD) applies each UTXO by the price when it was last moved to make the indicator some advantages overseeing the market.&#x20;

**1) Lost Old Coins' influence on the metric is minimized.**

For example, UTXOs that locates at the Age Band of 10 years to infinity could be assumed lost since it hasn't moved for a long time. UTXOs like these could be represented as a substantial amount in the normal UTXO Age Bands but it's minimized at the Realized Cap- UTXO Age Bands because of the low price that bitcoin was at the time.&#x20;

Applying Realized price naturally accounts for long-held but lost coins.

**2) Represents Stored Value as it counts for each economical circumstance at the time along with age band.**

Bitcoin's price has been x10000 since its creation and equalling the same amount of purchase at the cost of a dollar with standards today might be misleading in evaluating stored value. Realized Cap - UTXO Age Bands accounts for the economic standard of the according to Band Age.

### By value itself <a href="#interpretation" id="interpretation"></a>

* **High value(Native Value) & Dominance(%) in certain UTXO Age Band**\
  **-** Age Band's type of investor has more representative &#x20;

For example, if the UTXO Age Band of 3 years to 5 years have the greatest Realized Cap - UTXO Age Bands,

1\) It is possible to interpret it as investors that held 3 to 5 years have more potential of influencing the market both in terms of age and stored value.&#x20;

2\) The average price range bought at the time could indicate an important price level in the market. &#x20;

* &#x20;**Low value(Native Value) & Dominance(%) in certain UTXO Age Band**

For example, if the UTXO Age Band of 3 years to 5 years has the least UTXO Age Band Value,

1\) It is possible to interpret it as investors that held 3 to 5 years have less potential of influencing the market than other UTXO Age Band in terms of economical stored value.

2\) The average price range bought at the time could indicate an important price level but could fall behind compared to other UTXO Age Bands.&#x20;

### By examining trend  <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

* **Longer UTXO Aged Bands Gaining Dominance or Larger in Depth**\
  \- More UTXOs are being held for the Long term = **More HOLDing**

As comparatively newer coins are being held or so to speak HODLed without any movement in the network, it moves on to the next UTXO Age Bands implying that more coins are being held in the long term and more values are being stored according to Age Band.

* **Younger UTXO Aged Bands Gaining Dominance or Larger in Depth**\
  **-** Old Coins Being Renewed to Younger Coins **= Old Coins Being Circulated**

As older coins are being transferred in the network, they are destroyed and become new UTXO making the younger UTXO Age Bands increase in value which results in young UTXO Age Bands growing in size.&#x20;

## Link to Our Data

* [Realized Cap - UTXO Age Bands USD Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/realized-cap-utxo-age-bands-usd?window=DAY\&priceScale=linear\&metricScale=linear)
* [Realized Cap - UTXO Age Bands (%) Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/realized-cap-utxo-age-bands-percent?window=DAY\&priceScale=linear\&metricScale=linear)


# Realized Price - UTXO Age Bands

UTxO Realized Price Age Distribution is a set of realized prices along with age bands.

## Definition

UTxO Realized Price Age Distribution is a set of realized prices along with age bands. The metrics help us to overview each cohort’s holding behavior by overlaying a set of different realized prices. Realized price is calculated as Realized Cap divided by the total supply.

$$
\text{UTxO Realized Price Age Distribution} = \frac{\text{UTxO Realized Age Distribution for each band (USD)}}{\text{UTxO Age Distribution for each band (Native)}}
$$


# UTXO Count - Age Bands

UTXO Count - Age Bands shows the number of UTXOs that were last moved within a specified age band.

## Definition

UTXO Count - Age Bands shows the number of UTXOs that were last moved within a specified age band. Each colored band represents the number of UTXOs in existence, that were last moved within the denoted time period.&#x20;

$$
\text{UTXO Count - Age Bands} = {\sum\_{u \in utxos} \mathbb{I}(a\_i \leq \text{lifespan}\_u < b\_i) }
$$

$$
\text{UTXO Count - Age Bands (%)} =\frac{\sum\_{u \in utxos} \mathbb{I}(a\_i \leq \text{lifespan}*u < b\_i) }{\sum*{u \in utxos}1}\*100
$$

$$
\[a\_i, bi) \in \[\[0, 1d), \[1d, 1w), \[1w, 1m), \[1m, 3m), \[3m, 6m), \[6m, 12m), \[12m, 18m), \[18m, 24m)\ \[2y, 3y), \[3y, 5y), \[5y, 7y), \[7y, 10y), \[10y, \inf)
$$

| Metric                     | Definition                                                                                                                           |
| -------------------------- | ------------------------------------------------------------------------------------------------------------------------------------ |
| UTXO Count - Age Bands     | Each colored band represents the number of UTXOs in existence, that was last moved within the denoted time period                    |
| UTXO Count - Age Bands (%) | Each colored band represents the **percent of the ratio** of UTXOs in existence that were last moved within the denoted time period. |

## Interpretation&#x20;

This indicator can be used to estimate the number of long-term and short-term holders that exist in each age band. UTXO Count- Age Bands could be interpreted as a 'proxy' to the actual holders that fit accordingly to the Age Band.&#x20;

### By value itself

* **High value(Native Value) & Dominance(%) in certain UTXO Age Band**\
  **-** High Number of investors that fit the Age Band &#x20;

For example, if the UTXO Age Band of 3 years to 5 years have the greatest UTXO Count - Age Bands,

1\) It is possible to interpret it as investors that held 3 to 5 years take a large portion of the market in terms of the number of participants.

2\) The price range bought at the time could indicate an important price level in the market. &#x20;

* &#x20;**Low value(Native Value) & Dominance(%) in certain UTXO Age Band**\
  **-**&#x4C;ow Number of investors that fit the Age Band &#x20;

For example, if the UTXO Age Band of 3 years to 5 years has the least UTXO Count - Age Bands,

1\) It is possible to interpret it as investors that held 3 to 5 years take a small portion of the market in terms of the number of participants.

2\) The price range bought at the time could indicate an important price level but could fall behind compared to other UTXO Age bands.&#x20;

### By examining trend  <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

* **Longer UTXO Aged Bands Gaining Dominance or Larger in Depth**\
  \- More UTXOs & holders are holding for the Long term = **More HOLDing Participants**

As comparatively newer coins are being held or so to speak HODLed without any movement in the network, it moves on to the next UTXO Age Bands implying that more coins are being held in the long term and more investors are HODLing.

* **Younger UTXO Aged Bands Gaining Dominance or Larger in Depth**\
  **-** Old Coins Being Renewed to Younger Coins **= Old Coins Being Circulated**

As older coins are being transferred in the network, they are destroyed and become new UTXO making the younger UTXO Age Bands increase in value which results in young UTXO Age Bands growing in size.&#x20;

## Link to Our Data

* [UTXO Count - Age Bands](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-count-age-bands?window=DAY\&priceScale=linear\&metricScale=linear) [Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-count-age-bands?window=DAY\&priceScale=linear\&metricScale=linear)
* [UTXO Count - Age Bands(%)](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-count-age-bands-percent?window=DAY\&priceScale=linear\&metricScale=linear) [Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-count-age-bands-percent?window=DAY\&priceScale=linear\&metricScale=linear)


# Spent Output Age Bands

Spent Output Age Bands is a set of all spent outputs that were created within a specified age band.

## Definition

Spent Output Age Bands is a set of all spent outputs that were created within a specified age band. Each colored band represents the total value of spent outputs, that were last created within the denoted time period. This indicator summarizes the behaviors of long-term and short-term holders along with the price actions.

$$
\text{Spent Output Age Bands} ={\sum\_{o \in \text{spent outputs}} \text{value}\_o \* \mathbb{I}(a\_i \leq \text{lifespan}\_o < b\_i)}
$$

$$
\text{Spent Output Age Bands(USD)} =\text{price}*{current}\*{\sum*{o \in \text{spent outputs}} \text{value}\_o \* \mathbb{I}(a\_i \leq \text{lifespan}\_o < b\_i)}
$$

$$
\text{Spent Output Age Bands(%)} =\frac{\sum\_{o \in \text{spent outputs}} \text{value}*o \* \mathbb{I}(a\_i \leq \text{lifespan}*o < b\_i)}{\sum*{o \in \text{spent outputs}} \text{value}*{o}}\*100
$$

$$
\[a\_i, bi) \in \[\[0, 1d), \[1d, 1w), \[1w, 1m), \[1m, 3m), \[3m, 6m), \[6m, 12m), \[12m, 18m), \[18m, 24m)\ \[2y, 3y), \[3y, 5y), \[5y, 7y), \[7y, 10y), \[10y, \inf)
$$

| Metric                     | Definition                                                                                                                             |
| -------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- |
| Spent Output Age Bands     | Each colored band represents the t**otal value of** spent outputs, that were last created within the denoted time period.              |
| Spent Output Age Bands USD | Each colored band represents the total value of spent outputs, that were last created within the denoted time period **in USD value**. |
| Spent Output Age Bands (%) | Each colored band represents **the ratio of** the total value of spent outputs, that were last created within the denoted time period. |

## Interpretation&#x20;

This indicator summarizes the behavior of long-term and short-term holders along with the price actions. Beyond just long-term & short-term holders' behavior, it is possible to screen the specific Aged UTXOs (Cohort) behavior and their reaction to certain price range, market atmosphere. As price rises/falls, it is advised to watch out for values in the Spent Output Age Bands to further gain insights on the market through analyzing its participants.&#x20;

\
Unlike UTXO Age Bands, Spent Output Age Bands focus on the UTXOs that were destroyed within the set metric window. With the help of Spent Output Age Bands, it is possible to pinpoint which aged UTXOs (according to Age Bands timeline) were destroyed in what amount. Using this knowledge, investors can correlate any price movement or changes in the network with the action of long-term/short-term holders' action.&#x20;

### By value itself

* **High value(Native Value) & Dominance(%)** in certain Spent Output Age Bands\
  \- **Mostly accountable for changes in the network**

For example, if the UTXO Age Band of 3 years to 5 years have the greatest Spent Output Age Bands in terms of value or dominance, it could be interpreted that investors of 3 years to 5 years are mostly accountable for any price movement or changes that occur in the market within a set metric window.&#x20;

## Link to Our Data

* [Spent Output Age Bands Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/spent-output-age-bands?window=DAY\&priceScale=linear\&metricScale=linear)
* [Spent Output Age Bands USD Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/spent-output-age-bands-usd?window=DAY\&priceScale=linear\&metricScale=linear)
* [Spent Output Age Bands (%) Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/spent-output-age-bands-percent?window=DAY\&priceScale=linear\&metricScale=linear)


# UTXO Bands (Value)

![](/files/SYLOa9vonc7RxmRt1X7P)

1. UTXO Value Bands shows the distribution of all UTXOs according to their value
2. Each colored band represents the standards stated below.
3. Because of their categorization by Value Bands, these metrics allow investors to infer market changes by investors' hold amount as broad as **'Whales/Retails'** or derive meanings set by **Specific Value Cohort**.&#x20;

## What are the differences between these metrics?

Each colored band represents the standards that are stated below.

### 1) Finding out each value band's 'Total UTXO Amount'

UTXO Value Bands shows the distribution of all UTXOs according to their value. Each colored band represents the total value of all UTXOs, that has a value within the denoted range.&#x20;

{% content-ref url="/pages/VsZbC8mUUilRJD9I6LGk" %}
[UTXO Value Bands](/cryptoquant-metrics/utxo/utxo-bands-value/utxo-value-bands)
{% endcontent-ref %}

### 2)Finding out each value band's 'Realized Cap'

Realized Cap - UTXO Value Bands show the distribution of realized cap of a specified value band. Each colored band represents the Realized Cap of UTXOs in existence, which has a value within the denoted range in USD value. Realized Cap is calculated by valuing each UTXO by the price when it was last moved.

{% content-ref url="/pages/cfRgXP7MKlNALVtEjOMb" %}
[Realized Cap - UTXO Value Bands USD](/cryptoquant-metrics/utxo/utxo-bands-value/realized-cap-utxo-value-bands-usd)
{% endcontent-ref %}

### 3)Finding out each value band's 'Number of UTXOs'

UTXO Count - Value Bands shows the distribution of the number of UTXOs according to their value. Each colored band represents the number of UTXOs in existence, that has a value within the denoted range.&#x20;

{% content-ref url="/pages/2rULu14Zu6XfAC2xshes" %}
[UTXO Count - Value Bands](/cryptoquant-metrics/utxo/utxo-bands-value/utxo-count-value-bands)
{% endcontent-ref %}

### 4)Finding out each which value band is responsible for the spent output

Spent Output Value Bands show the distribution of all spent outputs according to their value. Each colored band represents the total value of spent outputs, that has a value within the denoted range.&#x20;

#### Steps

1\.  CryptoQuant collects UTXOs that was destroyed in a certain window

#### &#x20;                                                               ⬇

2\.  CryptoQuant categorizes them to each band and shows the result by values or by percentage

#### &#x20;                                                               ⬇&#x20;

3\. Investors interpret categorized values and conclude which value band's UTXOs were mostly responsible for any changes in the market.&#x20;

{% content-ref url="/pages/5WSTRHAL6pXzaKm1zlbZ" %}
[Spent Output Value Bands](/cryptoquant-metrics/utxo/utxo-bands-value/spent-output-value-bands)
{% endcontent-ref %}


# UTXO Value Bands

UTXO Value Bands shows the distribution of all UTXOs according to its value.

## Definition

UTXO Value Bands shows the distribution of all UTXOs according to its value. Each colored band represents the total value of all UTXOs, that have a value within the denoted range. This indicator summarizes the behaviors of whales or retails separated by amount of coins they hold along with price actions.

$$
\text{UTXO Value Bands} =\sum\_{u \in utxos} \text{value}\_u \* \mathbb{I}(a\_i \leq \text{value}\_u < b\_i)
$$

$$
\text{UTXO Value Bands(%)} =\frac{\sum\_{u \in utxos} \text{value}*u \* \mathbb{I}(a\_i \leq \text{value}*u < b\_i)}{\sum*{u \in utxos} \text{value}*{u}}\*100
$$

$$
\[a\_i, bi) \in \[0, 0.01), \[0.01, 0.1), \[0.1, 1), \[1, 10), \[10, 100), \[100, 1k), \[1k, 10k), \[10k, inf)
$$

| Metric               | Definition                                                                                                              |
| -------------------- | ----------------------------------------------------------------------------------------------------------------------- |
| UTXO Value Bands     | Each colored band represents **the total value** of all UTXOs, that have a value within the denoted range               |
| UTXO Value Bands (%) | Each colored band represents **the ratio of** the total value of all UTXOs, that have a value within the denoted range. |

## Interpretation&#x20;

This indicator summarizes the behaviors of whales or retails separated by the amount of coins they hold along with price actions. As price rises/falls, it is advised to watch out for shifting distribution in the UTXO Value Bands to further gain insights on the market through analyzing its participants. \
\
It provides valuable tools for analyzing static macro views of holders' amount distribution (Whale/Retails) in the network and viewing the macro shift in influence difference between Whale and the retails.

### By value itself <a href="#interpretation" id="interpretation"></a>

* **High value(Native Value) & Dominance(%) in certain UTXO Value Band**\
  **-** Value Band's type of investor has more representative&#x20;

For example, if the UTXO Value Band of 1k to 10k has the greatest UTXO Value Band Value,

It is possible to interpret it as investors that hold 1k to 10k who are most likely to be whales have more potential of influencing the market. &#x20;

* &#x20;**Low value(Native Value) & Dominance(%) in certain UTXO Value Band**\
  \- Less influence & type of investor has less representative&#x20;

For example, if the UTXO Value Band of 1k to 10k has the lowest UTXO Value Band Value,

1\) It is possible to interpret it as investors that hold 1k to 10k who are most likely to be whales have less potential of influencing the market than other UTXO Value Band. &#x20;

### By examining trend  <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

* **Larger UTXO Value Bands Gaining Dominance or Larger in Depth**\
  \- More UTXOs are being held in the hands of the possible whales = **Increasing** **Whale Dominance**

More UTXOs are being in large quantities that are mostly held by whales. Unlike having mid-sized UTXOs in several numbers, the increasing number of big-sized UTXO (meaning in the amount) is strong evidence of whale presence. \
\
&#x20;In addition, instead of UTXOs being in small amounts, it could indicate that the individual size of UTXOs is starting to be managed in a big chunk.&#x20;

* **Smaller UTXO Value Bands Gaining Dominance or Larger in Depth**\
  **-** More UTXOs are being held in the hands of the possible retail = **Possible** **Decrease of** **Whale Dominance**

As more UTXOs are getting a smaller amount in size, it could indicate that retails are gaining more possession of the holdings.&#x20;

#### **Note** <a href="#indicating-the-level-of-exchange-activity" id="indicating-the-level-of-exchange-activity"></a>

* Identifying the characteristics of UTXOs identical to the wallet/investors might be misleading.\
  ex. Whales could have multiple small-sized UTXOs and do not show up in the large value bands.&#x20;

## Link to Our Data

* [UTXO Value Bands Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-value-bands?window=DAY\&priceScale=linear\&metricScale=linear)
* [UTXO Value Bands (%) Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-value-bands-percent?window=DAY\&priceScale=linear\&metricScale=linear)


# Realized Cap - UTXO Value Bands USD

Realized Cap - UTXO Value Bands show the distribution of realized cap of a specified value band.

## Definition

Realized Cap - UTXO Value Bands show the distribution of realized cap of a specified value band. Each colored band represents the Realized Cap of UTXOs in existence, which has a value within the denoted range in USD value. Realized Cap is calculated by valuing each UTXO by the price when it was last moved. This indicator summarizes the capitalization held by whales and retails.

$$
\text{Realized Cap - UTXO Value Bands USD} =\sum\_{u \in utxos} \text{value}\_u \* \mathbb{I}(a\_i \leq \text{value}*u < b\_i) \* \text{Price}*{\text{u, at created}}
$$

$$
\text{Realized Cap - UTXO Value Bands (%)} =\frac{\sum\_{u \in utxos} \text{value}*u \* \mathbb{I}(a\_i \leq \text{value}*u < b\_i) \* \text{Price}*{\text{u, at created}}}{\sum*{u \in utxos} \text{value}*{u} \* \text{Price}*{\text{u, at created}}} \* 100
$$

$$
\[a\_i, bi) \in \[0, 0.01), \[0.01, 0.1), \[0.1, 1), \[1, 10), \[10, 100), \[100, 1k), \[1k, 10k), \[10k, inf)
$$

| Metric                              | Definition                                                                                                                        |
| ----------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- |
| Realized Cap - UTXO Value Bands USD | Each colored band represents the Realized Cap of UTXOs in existence, that have a value within the denoted range **in USD value**. |
| Realized Cap - UTXO Value Bands (%) | Each colored band represents **the ratio of** Realized Cap of UTXOs in existence, that have a value within the denoted range.     |

## Interpretation&#x20;

This indicator summarizes the behaviors of whales or retails separated by the amount of coins they hold along with price actions. As price rises/falls, it is advised to watch out for shifting distribution in the UTXO Value Bands to further gain insights on the market through analyzing its participants. \
\
It provides valuable tools for analyzing static macro views of holders' amount distribution (Whale/Retails) in the network and viewing the macro shift in influence difference between Whale and the retails.

Different from UTXO Value Bands indicating UTXO native values or USD value which applies the current same price standard to each band, Realized Cap - UTXO Value Bands USD applies each UTXO by the price when it was last moved makes the indicator some advantages overseeing the market.&#x20;

**1) Lost Old Coins' influence on the metric is minimized.**

Applying Realized price naturally accounts for long-held but lost coins. For example, UTXOs that located at the Value Band of 1k to 10k may be great in amount but if it is held over 10 years without any movement, it could be considered lost. UTXOs like these could be represented as a substantial amount in the normal UTXO Value Bands but it's minimized at the Realized Cap- UTXO Value Bands because of the low price that bitcoin was at the time.&#x20;

**2) Represents Stored Value as it counts for each economical circumstance at the time along with Value band.**

Bitcoin's price has been x10000 since its creation and equalling the same amount of purchase at the cost of a dollar with standards today might be misleading in evaluating stored value. Realized Cap - UTXO Value Bands accounts for the economic standard of the according to Band Age.

### By value itself <a href="#interpretation" id="interpretation"></a>

* **High value(Native Value) & Dominance(%) in certain Realized UTXO Value Band**\
  **-** Value Band's type of investor has more representative&#x20;

For example, if the UTXO Value Band of 1k to 10k has the greatest UTXO Value Band Value,

1\) It is possible to interpret it as investors that hold 1k to 10k who are most likely to be whales have more potential of influencing the market in terms of both amount and the total amount it was paid to acquire.&#x20;

2\) The average price range bought by the according to UTXO Value Bands(Whales/Retails) could indicate an important price level in the market. &#x20;

* &#x20;**Low value(Native Value) & Dominance(%) in certain UTXO Value Band**\
  \- Less influence & type of investor has less representative&#x20;

For example, if the UTXO Value Band of 1k to 10k has the lowest UTXO Value Band Value,

It is possible to interpret it as investors that hold 1k to 10k who are most likely to be whales have less potential of influencing the market than other UTXO Value Band in terms of both amount and the total amount it was paid to acquire.&#x20;

### By examining trend  <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

* **Larger UTXO Value Bands Gaining Dominance or Larger in Depth**\
  \- More UTXOs are being held in the hands of the possible whales and more capital (stored value) is being used to acquire them = **Increasing** **Whale Dominance**

More UTXOs are being in large quantities that are mostly held by whales or in terms of capital it was required to acquire UTXOs. Unlike having mid-sized UTXOs in several numbers, increasing the number of big-sized UTXO (meaning in the amount) is strong evidence of whale presence. \
\
&#x20;In addition, instead of UTXOs being in small amounts, it could indicate that the individual size of UTXO is starting to be managed in a big chunk.&#x20;

* **Smaller UTXO Value Bands Gaining Dominance or Larger in Depth**\
  **-** More UTXOs are being held in the hands of the possible retail = **Possible** **Decrease of** **Whale Dominance**

As more UTXOs are getting a smaller amount in size, it could indicate that retails are gaining more possession of the holdings, and retails are storing more value into the network.&#x20;

## Link to Our Data

* [Realized Cap - UTXO Value Bands USD](https://cryptoquant.com/asset/btc/chart/network-indicator/realized-cap-utxo-value-bands-usd?window=DAY\&priceScale=linear\&metricScale=linear) [Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/realized-cap-utxo-value-bands-usd?window=DAY\&priceScale=linear\&metricScale=linear)
* [Realized Cap - UTXO Value Bands USD (%)](https://cryptoquant.com/asset/btc/chart/network-indicator/realized-cap-utxo-value-bands-percent?window=DAY\&priceScale=linear\&metricScale=linear) [Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/realized-cap-utxo-value-bands-percent?window=DAY\&priceScale=linear\&metricScale=linear)


# UTXO Count - Value Bands

UTXO Count - Age Bands shows the distribution of the number of UTXOs according to its value.

## Definition

UTXO Count - Age Bands shows the distribution of the number of UTXOs according to its value. Each colored band represents the number of UTXOs in existence, that has a value within the denoted range. This indicator can be used to estimate the number of whale and retail holders by comparing each band.

$$
\text{UTXO Count - Value Bands} =\sum\_{u \in utxos} \mathbb{I}(a\_i \leq \text{value}\_u < b\_i)
$$

$$
\text{UTXO Count - Value Bands (%)} =\frac{\sum\_{u \in utxos} \mathbb{I}(a\_i \leq \text{value}*u < b\_i) }{\sum*{u \in utxos} 1} \* 100
$$

$$
\[a\_i, bi) \in \[0, 0.01), \[0.01, 0.1), \[0.1, 1), \[1, 10), \[10, 100), \[100, 1k), \[1k, 10k), \[10k, inf)
$$

| Metric                       | Definition                                                                                                                  |
| ---------------------------- | --------------------------------------------------------------------------------------------------------------------------- |
| UTXO Count - Value Bands     | Each colored band represents **the number of UTXOs** in existence, that have a value within the denoted range.              |
| UTXO Count - Value Bands (%) | Each colored band represents **the ratio of** the number of UTXOs in existence, that have a value within the denoted range. |

## Interpretation&#x20;

This indicator can be used to estimate the number of whale and retail holders by comparing each band. UTXO Count- Value Bands could be interpreted as a 'proxy' to the actual holders count that fit according to the Value Band.&#x20;

### By value itself

* **High value(Native Value) & Dominance(%) in certain UTXO Value Band**\
  **-** High Number of investors that fit the Value Band &#x20;

For example, if the UTXO Value Band of 1k to 10k has the greatest UTXO Count - Value Bands,

1\) It is possible to interpret it as investors that hold at least 1k to 10k (possible whales) take a large portion of the market in terms of the number of participants.

2\) The price range bought at the time could indicate an important price level in the market in terms of the number of holders. &#x20;

* &#x20;**Low value(Native Value) & Dominance(%) in certain UTXO Value Band**\
  **-**&#x4C;ow Number of investors that fit the Value Band &#x20;

For example, if the UTXO Value Band of 1k to 10k has the least UTXO Count - Value Bands,

1\) It is possible to interpret it as investors that hold at least 1k to 10k (possible whales) take a small portion of the market in terms of the number of participants.

2\) The price range bought at the time could indicate a less important price level in the market in terms of the number of holders. &#x20;

### By examining trend  <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

* **Greater  UTXO Value Bands Gaining Dominance or Larger in Depth = Increasing** **Whale Dominance**\
  \- Holders that have the possibility of being a whale is increasing in numbers
* **Smaller UTXO Value Bands Gaining Dominance or Larger in Depth = Decreasing Whale Dominance**\
  **-**&#x48;olders that have the possibility of being retail is increasing in numbers&#x20;

## Link to Our Data

* [UTXO Count - Value Bands Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-count-value-bands?window=DAY\&priceScale=linear\&metricScale=linear)
* [UTXO Count - Value Bands (%) Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-count-value-bands-percent?window=DAY\&priceScale=linear\&metricScale=linear)


# Spent Output Value Bands

Spent Output Value Bands show the distribution of all spent outputs according to its value.

## Definition

Spent Output Value Bands show the distribution of all spent outputs according to its value. Each colored band represents the total value of spent outputs, that has a value within the denoted range. This indicator can be used to estimate the amount of coins moved by whale and retail holders

$$
\text{Spent Output Value Bands} =\sum\_{o \in \text{spent outputs}} \text{value}\_o \* \mathbb{I}(a\_i \leq \text{value}\_o < b\_i)
$$

$$
\text{Spent Output Value Bands (%)} =\frac{\sum\_{o \in \text{spent outputs}} \text{value}*o \* \mathbb{I}(a\_i \leq \text{value}*o < b\_i)}{\sum*{o \in \text{spent outputs}} \text{value}*{o}} \* 100
$$

$$
\[a\_i, bi) \in \[0, 0.01), \[0.01, 0.1), \[0.1, 1), \[1, 10), \[10, 100), \[100, 1k), \[1k, 10k), \[10k, inf)
$$

| Metric                       | Definition                                                                                                                  |
| ---------------------------- | --------------------------------------------------------------------------------------------------------------------------- |
| Spent Output Value Bands     | Each colored band represents **the total value of spent outputs**, that have a value within the denoted range.              |
| Spent Output Value Bands USD | Each colored band represents the total value of spent outputs, that have a value within the denoted range **in USD Value**. |
| Spent Output Value Bands (%) | Each colored band represents **the ratio of** the total value of spent outputs, that have a value within the denoted range. |

## Interpretation&#x20;

This indicator can be used to estimate the amount of coins moved by whale and retail holders. As price rises/falls, it is advised to watch out for values in the Spent Output Value Bands to further gain insights on the market through analyzing its participants.&#x20;

Unlike UTXO Value Bands, Spent Output Age Bands focus on the UTXOs that were destroyed within the set metric window. With the help of Spent Output Age Bands, it is possible to pinpoint  which sized UTXOs were destroyed in what amount. Using this knowledge, investors can correlate any price movement or changes in the network with the action of whales/retails' action precisely.&#x20;

### By value itself

* **High value(Native Value) & Dominance(%)** in certain Spent Output Value Bands\
  \- **Mostly accountable for changes in the network**

For example, if the UTXO Value Band of 1k to 10k has the greatest Spent Output Age Bands in terms of value or dominance, it could be interpreted that investors holding at least 1k to 10k are mostly accountable for any price movement or changes that occur in the market within a set metric window.&#x20;

## Link to Our Data

* [Spent Output Value Bands Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/spent-output-value-bands?window=DAY\&priceScale=linear\&metricScale=linear)
* [Spent Output Value Bands USD Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/spent-output-value-bands-usd?window=DAY\&priceScale=linear\&metricScale=linear)
* [Spent Output Value Bands (%) Live Chart](https://cryptoquant.com/asset/btc/chart/network-indicator/spent-output-value-bands-percent?window=DAY\&priceScale=linear\&metricScale=linear)


# Market Data/Indicators

Entry into Market Data/Indicators

| Data/Indicator                                                                         | Definition                                                                                                                         | Implied                                                                                                                                                                                                                                                                    |
| -------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Liquidation                                                                            | When investor close their position voluntarily or by forced liquidation which comes with bankruptcy procedure                      | <p>Any form of liquidation could affect the price and call in for another action of forced liquidation</p><p></p><p>Ex. Short/Long Squeeze </p>                                                                                                                            |
| [Taker Buy Sell Volume/Ratio](/cryptoquant-metrics/market/taker-buy-sell-volume-ratio) | ​Defined as the ratio of Taker Buy Volume divided by the Taker Sell Volume                                                         | <p></p><ul><li><p>Over values of  '1' </p><p>Dominant <strong>Bullish</strong> sentiment</p></li><li><p>Under values of  '1'</p><p>Dominant <strong>Bearish</strong> sentiment  </p></li></ul>                                                                             |
| [Open Interest](/cryptoquant-metrics/market/open-interest)                             | The number of open positions (including both long and short positions) currently on a derivative exchange's BTC/USD trading pairs. | <p></p><ul><li><p>Increasing</p><p>-Adding liquidity, volatility, and attention -Supporting ongoing price trend</p></li><li><p>Decreasing</p><p>Exiting liquidity, volatility, and attention </p></li></ul>                                                                |
| [Funding Rates](/cryptoquant-metrics/market/funding-rates)                             | Periodic payments to long or short traders based on the difference between the perpetual contract market and the spot price        | <p></p><ul><li><p>Rates over  ‘0’</p><p>Dominant Long Sentiment</p></li><li><p>Rates under ‘0’</p><p>Dominant Short Sentiment </p></li><li><p>Increasing</p><p>Longs gaining dominance</p><p></p></li><li><p>Decreasing trend</p><p>Shorts gaining dominance</p></li></ul> |
| [Estimated Leverage Ratio](/cryptoquant-metrics/market/estimated-leverage-ratio)       | Defined as the ratio of open interest divided by the reserve of an exchange                                                        | <p></p><ul><li><p>High</p><p>-Over Leveraged Market</p><p>-Possible Volatility</p></li><li><p>Low</p><p>Low Leveraged Market</p></li><li><p>Increasing </p><p>Holding More Leverage</p></li><li><p>Decreasing trend</p><p>Taking off Leverage</p></li></ul>                |
| [Fund Flow Ratio](/cryptoquant-metrics/exchange/fund-flow-ratio)                       | The total BTC amount flowing into or out of exchange divided by the total BTC amount transferred on the whole Bitcoin network      | <p></p><ul><li><p>Increasing</p><p>-Possible Volatility</p><p>-Active Exchanges' Activity </p></li><li><p>Decreasing</p><p>Possible OTC</p></li></ul>                                                                                                                      |


# Open Interest

Open interest is defined as the amount of open positions (including both long and short positions) currently on a derivative exchange's BTC/USD trading pairs.

## Definition

Open interest is defined as the number of open positions (including both long and short positions) currently on a derivative exchange's BTC/USD trading pairs.

## Interpretation

<figure><img src="https://images.surferseo.art/07cf81b9-6bdd-4e26-a1cc-fcd2ed506640.png" alt="Bitcoin: Open Interest - All Exchanges, All Symbol – Source: CryptoQaunt"><figcaption></figcaption></figure>

A large value of open interest can indicate increased **volatility** in the price of BTC. For this reason, an open interest chart could also be useful for determining the market tops and bottoms with additional indicators.

* **Increasing**: **Adding liquidity, volatility, and attention + supporting ongoing price trend**

As positions and contracts are continuously being opened, it indicates more liquidity, volatility, and attention are coming into the derivative market. Increasing trend in OI could support the current ongoing price trend.

* **Decreasing**: **Exiting liquidity, volatility, and attention**&#x20;

As Open Interest (OI) decrease, it indicates futures contract/ positions are being closed. In turn, this might trigger the possibility of long/short squeeze caused by sudden price movement or vice versa.

### Understanding Open Interest

<figure><img src="https://images.surferseo.art/80932c9a-b7a0-4863-92b5-6a1618ef5018.png" alt="Ethereum: Open Interest - All Exchanges, All Symbol – Source: CryptoQuant"><figcaption></figcaption></figure>

Open interest plays a pivotal role in the world of cryptocurrency trading, and generally speaking especially on derivative exchanges. By exploring the concept in more detail, traders and investors can gain valuable insights into market trends and make informed decisions.

### **Why Open Interest Matters**

While the definition of open interest is quite straightforward, its interpretation and real-world implications are more profound. Here's why open interest matters:

**Volatility Indicator:** One of the primary reasons open interest matters is its role as a volatility indicator. When open interest is high, it signifies increased activity in the BTC/USD derivative market. This heightened activity often leads to greater price volatility.

**Timing Market Tops and Bottoms:** In addition to measuring volatility, open interest can serve as a valuable tool for timing market tops and bottoms. Traders can use open interest charts alongside other indicators to enhance their market analysis and decision-making.

### **The Relationship Between Open Interest and Price Trends**

Understanding the relationship between open interest and price trends is crucial. Here's how these two aspects are interconnected:

#### **Increasing Open Interest**

<figure><img src="https://images.surferseo.art/b212f200-46d5-4faa-9855-84837f1809d8.webp" alt="Increasing BTC Open Interest – Source: G a a h"><figcaption></figcaption></figure>

When there is a high open interest amount, it signifies several important factors:

**Adding Liquidity:** As open interest increases, more participants and new money entering the market means increased liquidity, making it easier to enter or exit positions.

**Heightened Volatility:** A higher open interest often coincides with higher price volatility, providing trading opportunities.

**Market Attention:** Higher open interest indicates more market participants are paying attention to the BTC/USD derivative market.

As open interest increases this can lend support to the existing price trend, whether it's bullish or bearish.

#### **Decreasing Open Interest**

<figure><img src="https://images.surferseo.art/e5830858-de94-434c-940d-417e90bddf35.webp" alt="Decreasing Bitcoin Open Interest – Source: Maartunn"><figcaption></figcaption></figure>

Conversely, when there is a low open interest indicates different dynamics in the market:

**Exiting Liquidity:** As open interest decreases, participants are closing their positions, potentially signaling a decline in market sentiment and liquidity.

**Reduced Volatility:** Lower open interest may lead to reduced price volatility, making the market less attractive for traders.

**Shift in Attention:** A decrease in open interest might suggest a shift in market attention to other assets or trading opportunities.

A low open interest can also trigger events like short squeezes or long squeezes, resulting from sudden price movements.

### **Practical Applications**

The value of open interest extends beyond mere observation. It can be practically applied in various ways:

**Timing Market Moves:** By closely monitoring open interest alongside other technical indicators, traders can better time their entries and exits, potentially maximizing their profitability.

**Volatility Analysis:** Open interest's strong correlation with market volatility makes it a useful tool for traders looking to capitalize on price swings.

**Statistical Correlation Analysis:** Statistical analysis reveals a positive correlation between open interest and volatility. This finding provides traders and investors with a data-driven approach to understanding market dynamics.

### **Insights from Trading Volume, Market Participants, and Futures Contracts**

The interplay between trading volume, market participants, and futures contracts significantly influences open interest in the cryptocurrency market. Higher trading volumes boost liquidity and increase price volatility, attracting more market participants and subsequently elevating open interest.

Various market players, including retail traders, institutions, "whales," and miners, influence both trading volume and open interest. Futures contracts, central to cryptocurrency derivatives, also shape open interest through leveraged positions and hedging strategies. These dynamics underpin the cryptocurrency market and are crucial for traders and investors.

## Use Case

### Statistical Correlation Analysis to Volatility

We find that open interest (independent variable) and volatility (response variable) are statistically in **positive correlation** where p-values of F-statistic (for linear model) and the slope are less than 0.001. R-square of the model is estimated as 0.36 where the value is reasonably high considering financial raw data.

![](/files/-MCBUg6ooEjgEGsdPI3O)

The settings for this experiment are the followings:

* We consider date range from '2018-11-05' to '2020-06-01'.
* We resample the data in 15 days to compute volatility.&#x20;
* Volatility is computed as subtraction of max to min value of every resampled window.
* Values in the above chart are in log form.

## Link to Our Data

* [Open Interest in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/derivatives/open-interest?exchange=all_exchange\&symbol=all_symbol\&window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)
* [Open Interest in CryptoQuant Data API docs](https://cryptoquant.com/docs/#operation/getOpenInterest)


# Funding Rates

Funding rates are periodic payments between traders to make the perpetual futures contract price close to the index price.

## Funding Rate: Definition

Funding rates make the perpetual futures contracts price close to the index price. It is made to be closer to the spot prices and covers some of the gap generated by the perpetual period of time.

All cryptocurrency derivatives exchanges use funding rates for perpetual contracts and the standard unit is a percentage.

Funding Rate is a result of market behaviors and could be used to maker some interpretation in the derivative market which also is a dominant price maker in the market. However, correlating high funding rates with inevitable price drop could be a wrong interpretation. In the bull market, it has a tendency to naturally bring higher funding rates with price rises.

\*CryptoQuant provides **minute-based funding rates** compared to exchange deciding every 8 hours

## Interpretation

The funding rate represents traders' sentiments in the perpetual swaps market and the amount is proportional to the number of contracts.

### By Value Itself <a href="#interpretation" id="interpretation"></a>

<figure><img src="/files/jkvbXOfgDf8ztwjsdIZL" alt="BTC Funding Rates: All Exchanges, Long and Short Sentiment. Source: CryptoQuant"><figcaption></figcaption></figure>

#### **Dominant Long Sentiment (Rates over '0')**

<figure><img src="https://images.surferseo.art/565bb639-a033-4f7f-b91b-7c2f963b289c.webp" alt="Positive Funding Rate - All Exchanges. Source CryptoQuant"><figcaption></figcaption></figure>

A positive funding rate — above 0 — reflects bullish sentiment, as long traders dominate and pay shorts to keep positions open. While it signals confidence in upward price movement, it mainly shows market positioning, not a guarantee of continued price gains. The optimism embedded in positive funding rates suggests a collective belief among traders in the potential for upward price movement.

*Example:* During a Bitcoin bull market, positive funding rates might persist as traders express confidence in the coin's upward trajectory. This situation could be seen as an endorsement of the prevailing positive market sentiment.

#### **Dominant Short Sentiment (Rates under '0')**

<figure><img src="https://images.surferseo.art/5895484e-0224-4e9e-9136-db21e2b9270d.webp" alt="Negative Funding Rate from BitMEX Exchange. Source: CrypotQuant"><figcaption></figcaption></figure>

On the flip side, negative funding rates (rates under '0') suggest a dominant bearish sentiment. In this scenario, short position traders are in control and are willing to pay long traders. Negative funding rates indicate a belief among traders that the market is more likely to experience a downward movement.

*Example:* In periods of uncertainty or amid negative news about the cryptocurrency market, negative funding rates might emerge as traders bet on a potential decline in prices. This could be interpreted as a cautious or bearish stance.

## By Examining Trend

<figure><img src="https://images.surferseo.art/1f698a58-0369-4b2e-9506-960741b0ac3d.png" alt="Bitcoin Funding Rate - All Exchanges. Source: CryptoQuant"><figcaption></figcaption></figure>

### **Increasing Trend: Longs Gaining Dominance**

When crypto funding rates show an increasing trend, it suggests that long positions are gaining dominance. Traders holding long positions are willing to pay short traders, indicating a prevailing bullish sentiment in the market.

Example: If Bitcoin's price has been on a week-long rise, an increasing trend in the funding rate could be anticipated, reflecting heightened expectations and confidence among traders in the cryptocurrency's upward trajectory.

This period may also witness a surge in leveraged positions as traders based on recent euphoria might enter the market. However, caution is advised, as cumulative liquidations could occur in the event of a steep price move, resulting in partial or total loss for those holding leveraged positions. Crypto exchanges might forcefully close such positions, especially if funding levels indicate unusually high fees.

### **Decreasing Trend: Shorts Gaining Dominance**

Conversely, a decreasing trend in funding rates implies that short positions are gaining dominance. Short traders are willing to pay long traders, suggesting a bearish sentiment in the market.

Example: During a period of heightened uncertainty in the crypto markets, a decreasing trend in funding rates may coincide with traders adopting a cautious approach, leading to an increase in short positions. Traders might be borrowing funds to take leveraged short positions, anticipating a negative funding rate due to the prevailing bearish sentiment.

### Perpetual Contracts

A Perpetual contract in the cryptocurrency market is intricately tied to funding rates, which are periodic payments exchanged between traders to bring the perpetual futures contract price in alignment with the index price. These rates are crucial in narrowing the gap created during the perpetual period, aiming to maintain proximity to spot prices.

Funding rates reflect market behavior and data shows traders insights into derivative market dynamics. However, it's essential to avoid simplistic correlations, as high funding rates don't necessarily predict an inevitable price drop.

Understanding the sentiment conveyed by funding rates—whether bullish with positive rates or bearish with negative rates—provides traders with valuable information to navigate the complex landscape of perpetual contracts in cryptocurrency markets. This includes gauging price rise expectations, assessing a funding fee for traders' leveraged positions, and indicating highly leveraged bets in the market.

Traders hoping to capitalize on bullish bets need to monitor funding rates closely, considering their impact on spot markets led by bitcoin traders. Balancing a leveraged position with an understanding of the trader's initial margin is key to navigating the dynamics of highly leveraged bets and making informed decisions in this dynamic market environment.

## End Notes

In such scenarios, it is crucial for traders to assess the market carefully, ensuring they have sufficient funds to cover potential losses, especially in leveraged positions. The negative funding rate could indicate a pessimistic outlook for the underlying asset, and traders should be mindful of the risks associated with leveraged trading in volatile crypto markets.

Delving deeper into the space of cryptocurrency derivatives, understanding the dynamics of crypto futures funding rates becomes paramount for traders and market watchers alike.

Examining trends in these rates unveils the ebb and flow of market dynamics, providing traders with valuable insights into the ever-shifting landscape of crypto futures and spot markets. As market participants navigate this intricate interplay between futures trading and spot markets, the significance of funding rates becomes increasingly apparent, offering a nuanced perspective for strategic decision-making.

## Link to Our Data

* [Funding Rates in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/derivatives/funding-rates?exchange=all_exchange\&window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=column)
* [Funding Rates in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/getFundingRates)


# Estimated Leverage Ratio

Estimated Leverage Ratio (ELR) is defined as the ratio of open interest divided by the reserve of an exchange

## Definition

Estimated Leverage Ratio (ELR) is defined as the ratio of open interest divided by the reserve of an exchange.

$$
\text{Estimated Leverage Ratio} = \frac{\text{Open Interest}}{\text{Amount of Reserve}}
$$

## Interpretation

Estimated Leverage Ratio indicates how much leverage is used by users on average.&#x20;

ELR for a derivative exchange tells us how much leverage is used by users on average. This information measures traders' sentiment whether they take a high risk or low risk.

### By value itself <a href="#interpretation" id="interpretation"></a>

It could be interpreted as the degree of leverage of the market

* **High**: **Over Leveraged Market+ Possible Volatility**

* **Low**: **Low Leveraged Market**

### By examining trend <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

It shows the sentiment or tendency of total investors' urge to use leverage.

* **Increasing trend: Holding More Leverage**

  Increasing in values indicates more investors are taking high leverage risk in the derivatives trade.&#x20;

  Also, if ELR value is high compared to the last couple of days, it indicates traders are quite confident in their positions.&#x20;
* **Decreasing trend**: **Taking off Leverage**

  Decreasing in values indicates more investors are taking off leverage risk in the derivatives trade.&#x20;

  Also, if ELR value is low compared to the last couple of days, it indicates traders are changing their views or finishing their positions.&#x20;

## Link to Our Data

* [Estimated Leverage Ratio in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/market-indicator/estimated-leverage-ratio?exchange=all_exchange\&window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)
* [Estimated Leverage Ratio in CryptoQuant Data API docs](https://cryptoquant.com/docs/#operation/getEstimatedLeverageRatio)


# Taker Buy Sell Volume/Ratio

Understanding Taker Buy Sell Volume/Ratio involves discerning if the order taker is a buyer or seller based on ask or bid prices, distinguishing long volume from taker seller volume.

## Definition: Taker Buy Sell Ratio/Volume

This concept is often confusing because every trade requires both a buyer and a seller of the given underlying asset. However, depending on whether the order taker is a buyer or seller (whether a transaction occurs at the ask price or the bid price), you can distinguish between long volume from taker seller volume.

**Taker Buy Volume**: Volume of buy orders filled by takers in perpetual swaps (USD)

**Taker Sell Volume**: Volume of sell orders filled by takers in perpetual swaps (USD)

**Taker Buy Ratio**: Taker Buy Volume / Total volume in perpetual swaps (USD)

**Taker Sell Ratio**: Taker Sell Volume / Total volume in perpetual swaps (USD)

**Taker Buy Sell Ratio**: Taker Buy Volume / Taker Sell Volume

*Note we unify the unit of return value to USD for each exchange where its contract specification may vary and covers perpetual swaps only.*

## Interpretation

A Taker buy or sell enables the transaction of a financial asset instantly at the current best available price. As takers are increasing it could be interpreted as they are willing to pay more to buy or sell at the highest level in an instant. Utilizing this feature, we can identify whether buying or selling pressure is great.

### By Value Itself

* **Over values of 1**: Taker buy Volumes > Taker Sell Volume-Dominant

It indicates to traders that more buyers are willing to buy coins at a higher price indicating that buying pressure is stronger than the selling pressure. It indicates a strong possibility of price rise and shows the bullish sentiment

* **Under values of 1:** Taker Sell Volumes > Taker Buy Volume-Dominant

It indicates that more sellers are willing to sell coins at a lower price indicating that sell pressure is stronger than the buying pressure.

#### **Note**

Even if the ratio is above 1 indicating that taker volume is dominant it does not necessarily mean that price is going up. It depends on the ratio and variance of volume that was traded on each bid/ask.

### Additional Explanation

#### **Taker**

In the context of trading, a taker is a market participant who places an order that is matched with an existing order on the order book. Takers "take" liquidity from the order book by executing trades at the current market price.

#### **Maker**

Maker trade refers to an order that goes on the order book (e.g. a limit order). These orders add volume to the order book, helping to 'make the market'.

#### **Buy Volume**

This represents the total volume and value of assets or securities bought by market participants during a specific time period. It indicates the total quantity of assets acquired in the market.

#### **Sell Volume**

Conversely, sell volume represents the total volume of assets or securities sold by market participants during a specific time period. It indicates the total quantity of assets disposed of in the market.

#### **Taker Buy Sell Ratio**

The ratio is a comparative measure that expresses the relationship between two quantities. In this context, the ratio provides insight into how buying volume compares to selling volume among market takers.

#### **Bid and Ask Price**

A maker who wants to buy an asset is willing to place limit orders in the order book at a lower price, and a maker who wants to sell is willing to place orders at a higher price.

The bid price is the highest current price a buyer is willing to pay for an asset.

The ask price is the lowest current price a seller is willing to sell a security for. There is always a bid price and an ask price in an actively traded asset which continuously fluctuates.

When takers buy at the bid price set by makers, the amount of assets traded between the two contributes to the taker sell ratio and seller volume. This volume is selling volume because it has the potential to move the price down. When takers sell at the ask price, the amount of assets traded contributes to the taker buy volume–this volume pushes up the price.

If the current market has more taker buy volume than taker sell volume, it means there is a tendency to increase the price as more trades occur at the ask price. When the current market has more taker sell volume than taker buy volume, it means there is a tendency to push the price down since there are more traders selling at the bid price.

### End Notes

The Taker Buy Sell Volume/Ratio stands as one of the pivotal indicators for traders. It offers valuable insights into market sentiment and potential price movements. Despite its initial complexity, this metric provides a concise yet powerful tool for navigating dynamic market conditions.

By evaluating the Taker Buy Sell Ratio and considering the interplay of volumes at bid and ask prices, traders can effectively gauge market dynamics. In doing so, this indicator becomes an indispensable asset for making informed decisions.


# Capitalization models

Alternative capitalization models to market price.

### Alternative Capitalization Models

The market price itself can be easily manipulated by forces, especially in cryptocurrency markets, which we call noise. In order not to be fooled by market price, traders need to see multiple **alternative capitalization models** to see how the market is going.

#### Market Cap

<figure><img src="https://images.surferseo.art/b4f984e0-d210-46de-8a48-8e0448e6e7c7.png" alt="Bitcoin Market Cap. Source: CryptoQuant"><figcaption></figcaption></figure>

Market Cap is defined as the total market capitalization of the coin, calculated by multiplying the total supply with its USD price.

$$
\text{Market Cap} = \text{Total Supply} \* \text{Price in USD}
$$

#### Realized Cap

<figure><img src="https://images.surferseo.art/5f05aba7-a19d-4fd5-b72b-fdaf257090b5.png" alt="Bitcoin Realized Cap. Source: CryptoQuant"><figcaption></figcaption></figure>

Realized Cap is the sum of each UTXO \* last movement price. Since cryptocurrencies can be lost, unclaimed, or unreachable through various bugs, Realized Cap is introduced to discount those coins which have remained unmoved for a long period. It is one way to attempt to measure the value of the coin. This can be described as an on-chain version of the volume-weighted average price (VWAP).

$$
\text{Realized Cap} = \sum\_i \text{UTXO}\_i \* \text{Price at creation}
$$

#### Average Cap

<figure><img src="https://images.surferseo.art/d91518a8-a005-4e29-9f48-948c35e2f944.png" alt="Bitcoin Average Cap. Source: CryptoQuant"><figcaption></figcaption></figure>

Average Cap is a forever moving average, calculated by dividing the cumulated sum of daily market cap by the age of the market. Instead of using fixed time for calculating the moving average (e.g. 50 days, 100 days ...), this serves as the true mean.

$$
\text{Average Cap} = \frac{\text{Market Cap}}{\text{Age in days}}
$$

#### Delta Cap

<figure><img src="https://images.surferseo.art/75acc51e-0a46-4e81-a7b9-cfa466b38ce8.png" alt="Bitcoin Delta Cap. Source: CryptoQuant"><figcaption></figcaption></figure>

Delta Cap is calculated as the subtraction of Realized Cap to Average Cap. Delta Cap is often used to spot market bottoms. Moreover, by analyzing the movement of Delta Cap which oscillates between Realized Cap and Average Cap, we could notice that market tops are reached when Delta Cap is near Realized Cap (in a log scaled chart).

$$
\text{Delta Cap} = \text{Realized Cap} - \text{Average Cap}
$$

#### Thermo Cap (Inflows Cap)

Thermo Cap is calculated as the weighted sum of mined coins by the creation price. This measures total capitalization flowed into the blockchain network, which in turn is to be called as Inflows Cap. As shown in the below figure, by comparing to Market Cap, Thermo Cap allows traders to spot market tops or bottoms.&#x20;

<figure><img src="/files/-MELiV3i2_66QbXErNSE" alt="Thermo Cap vs. Market Cap. Source: CryptoQuant"><figcaption><p>Smaller gap between market cap and thermo cap allows to see market bottoms as shown in red boxes.</p></figcaption></figure>

## Final Note

In conclusion, navigating the volatile terrain of cryptocurrency markets demands a nuanced understanding that goes beyond the simplicity of market prices. Alternative capitalization models serve as indispensable tools for the discerning investor, offering a more comprehensive perspective and mitigating the impact of market noise.

The Market Cap, a fundamental metric and capitalization model, computes the total market capitalization by multiplying the coin's total supply with its USD price. Realized Cap, on the other hand, factors in the movement of coins over time, discounting those that have remained stagnant. This provides a more accurate reflection of a coin's value, akin to an on-chain version of the volume-weighted average price.

The Average Cap introduces a dynamic element, eschewing fixed time frames and offering a moving average calculated by dividing the cumulative sum of daily market cap by the age of the market. Delta Cap, the subtraction of Realized Cap from Average Cap, becomes a valuable tool for identifying market bottoms and tops. Analyzing the oscillation of Delta Cap between Realized Cap and Average Cap unveils potential market trends, particularly when Delta Cap nears Realized Cap in a log-scaled chart.

Thermo Cap, or Inflows Cap, serves as a weighted sum of mined coins by creation price, unveiling the total capitalization flowing into the blockchain network. Comparing Thermo Cap to Market Cap enables traders to identify market tops or bottoms, with a smaller gap indicating potential market bottoms.

In this dynamic landscape, where words like "volatility" and "uncertainty" are divided by the innovative spirit of blockchain, these alternative capitalization models represent a forward-looking method for traders looking to make an investment. By incorporating these measures into their analyses, traders can present a more nuanced understanding of market dynamics, better equipped to navigate the present and future of cryptocurrency markets.

## Links to our Data

* [Market Cap in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/471?window=day)
* [Realized Cap in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/194?window=day)
* [Average Cap in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/195?window=day)
* [Delta Cap in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/196?window=day)
* [Thermo Cap in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/472?window=day)
* [Capitalization models in CryptoQuant Data API docs](https://cryptoquant.com/docs/#operation/getCapitalization)


# Realized Price

Realized Price is calculated as Realized Cap divided by the total coin supply.

## Definition

Realized Price is calculated as Realized Cap divided by the total coin supply. It measures the average price weighted by the supply of what the entire market participants paid for their coins. It can be interpreted as the on-chain support or resistance price.

$$
\text{Realized Price} = \frac{\text{Realized Cap}}{\text{Total Supply}}
$$

### Understanding Realized Price

<figure><img src="https://images.surferseo.art/d540298c-e1b0-418e-842d-29c88a819e3a.png" alt="Full History of Bitcoin Realized Price – Source CryptoQuant"><figcaption></figcaption></figure>

Understanding Realized Price is pivotal for anyone involved in on-chain analytics. At its core, Realized Price is a metric that provides insights into the actual market conditions and the average purchase price at which specific groups of cryptocurrency assets were acquired.

Realized Price is derived from the aggregation of historical transaction data. It's a sophisticated metric that takes into account the varying prices at which each unit of a cryptocurrency was bought. This differs from the simpler Market Price, which only provides a snapshot of the current price based on the most recent trades. In essence, Realized Price digs deep into the entire history of sales of a cryptocurrency, offering a much broader perspective on its value.

This metric reflects the average price at which investors have purchased a specific cryptocurrency, creating a more accurate representation of the market. In contrast, Market Price is influenced by current market trends and can sometimes be misleading, especially during periods of extreme volatility.

Realized Price provides a historical view of the cryptocurrency's price movement, highlighting the levels at which investors have bought and sold, which can be instrumental in predicting market trends. It's a reflection of the "realized" value of the currency in circulation, as opposed to the "theoretical" value indicated by Market Price.

### Realized Price vs. Market Price

Realized Price and Market Price are two distinct metrics, each offering unique insights into the crypto market. Understanding the differences between the two is vital for anyone looking to make informed decisions in the crypto space.

Market Price is the most straightforward of the two. It represents the current price of a cryptocurrency based on the most recent trades. It's what you see on cryptocurrency exchanges and what the majority of investors reference. However, it's essential to remember that Market Price is heavily influenced by the current supply and demand dynamics and can fluctuate rapidly.

Realized Price, on the other hand, provides a historical view of a cryptocurrency's average sale price. It considers the prices at which each unit of a cryptocurrency was acquired, leading to a more precise representation of the market. This history-based approach means that Realized Price is less susceptible to short-term price swings compared to Market Price.

While Market Price can be affected by factors like market manipulation and speculative trading, Realized Price is more resistant to such influences. As a result, Realized Price is often considered a more reliable metric for understanding the "real" value of a cryptocurrency, which can be invaluable for investors and analysts seeking a deeper comprehension of the market.

### **Bitcoin Realized Price**

<figure><img src="https://images.surferseo.art/f3d6bac7-d0ca-4b86-a0c1-377a2c83962b.png" alt="Bitcoin: Realized Price Chart – Source: CryptoQuant"><figcaption></figcaption></figure>

Realized Price, an often-overlooked metric, is a critical tool for Bitcoin investors. During turbulent market periods, it acts as an early warning system. When the Market Price falls below the Realized Price, it's a sign that, on average, Bitcoin holders are facing paper losses.

Value investors see this period as an opportunity to accumulate more Bitcoin. This accumulation phase often paves the way for a bull market as the Market Price rises above the Realized Price, as shown in the Bitcoin: Realized Price Chart.

This pattern has held true throughout Bitcoin's adoption cycles to date, highlighting the enduring importance of the Realized Price metric for cryptocurrency investor

### Use Cases of Realized Price

Realized Price has several noteworthy use cases in the world of cryptocurrency analytics. Here, in review, are a few key applications:

#### Market Valuation

Realized Price can provide a more accurate valuation of the cryptocurrency market, helping analysts assess whether the current market conditions are overvalued or undervalued.

#### Investment Decisions

Investors can use Realized Price to make more informed decisions. It can help identify potential buying or selling opportunities based on historical trends, enabling investors to time their moves more effectively.

#### Market Cycles

Realized Price can be a valuable tool for tracking market cycles. Understanding the phases of accumulation, distribution, and recovery can assist investors in adapting their strategies to prevailing market conditions.

#### Risk Management

Realized Price is instrumental in managing risk. By assessing the average price at which other investors entered the market, it's possible to gauge potential price levels where sell-offs or corrections may occur.

#### Analyzing Network Health

Realized Price can provide insights into the health of a cryptocurrency's network. Fluctuations in Realized Price can indicate changes in network dynamics, which can influence investor behavior and may impact overall market sentiment.

### End Notes

By leveraging the Realized Price metric, investors and analysts can make more well-informed decisions, improve their risk management, and develop a deeper understanding of market dynamics in the ever-evolving world of cryptocurrency.


# Exchange Whale Ratio

The total BTC amount of top 10 transactions (in terms of total BTC sent) divided by the total BTC amount flowing into exchange.

## Definition

The total BTC amount of the top 10 transactions (in terms of total BTC sent) divided by the total BTC amount flowing into exchanges.<br>

$$
\text{Exchange Whale Ratio} = \frac{\text{Sum of Top 10 Exchange Inflow TXs(BTC)}}{\text{Total Exchange Inflows in BTC}}
$$

## Interpretation

Find Whale Focused Exchanges with Top 10 Inflows. Looking at the relative size of the top 10 inflows to total inflows, it is possible to discover which exchanges whales use. For example, as Gemini has mostly whale users, it is possible for the price to rise or fall dramatically. This has potential risks, but also the possibility of arbitrage.

## Link to Our Data

* [Exchange Whale Ratio in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/595?window=day)
* [Exchange Whale Ratio in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/getExchangeWhaleRatio)


# MVRV (Market Value to Realized Value) Ratio

MVRV (Market Value to Realized Value) ratio is defined as an asset's market capitalization divided by realized capitalization.

## Definition

MVRV (Market Value to Realized Value) ratio is defined as an asset's market capitalization divided by [realized capitalization](https://cryptoquant.com/docs/#operation/getCapitalization).

$$
\text{MVRV Ratio} = \frac{\text{Market Cap}}{\text{Realized Cap}}
$$

### Market Value to Realized Value (MVRV) Overview

The Market Value to Realized Value (MVRV) ratio serves as a crucial metric in the world of cryptocurrency, offering valuable insights into market dynamics and investor behavior. Understanding how MVRV is measured and its implications can provide a nuanced perspective on the valuation of a cryptocurrency.&#x20;

Here's a comprehensive overview of the MVRV ratio:

#### **Measuring MVRV**

MVRV is calculated by comparing two key metrics: market capitalization and realized capitalization. Market capitalization is determined by multiplying the current market price of a cryptocurrency by its circulating supply. On the other hand, realized capitalization considers the aggregate value of all coins based on the price at which they were last transacted.

## Interpretation

By comparing two valuation methods, the MVRV ratio can tell us to get a sense of whether the price is fair or not, which means it is useful to get market tops and bottoms.&#x20;

It is important to note that historically, it has been an outstanding indicator to spot market top/bottom or local top/bottom that occurred through three halvings.

### By Value Itself <a href="#interpretation" id="interpretation"></a>

<figure><img src="/files/MbVqmGU2MoYT2N3RGReR" alt="Bitcoin Market Value to Realized Value (MVRV) Ratio. Source: CryptoQuant"><figcaption></figcaption></figure>

MVRV accounts both realized cap and market cap into account making certain values critical in making an investment decision.&#x20;

* Values over **‘3.7’**: **Possible Market Top**

  If the values go above 3.7, it could be reasonable to sell the position off
* Values under **‘1’**: **Possible Market Bottom**

  If the values go under &#x31;**,** it's a negative MVRV value and it is time to take a gradual long position.

### By Examining Trend <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

If Market cap growth outpaces that of the realized cap, MVRV values rise indicating possible motive for selling.

* **Increasing trend**: **Increasing selling pressure**

  As MVRV increases, it indicates that the market cap is outpacing realized cap meaning there is increasing motive for selling in the market.
* **Decreasing trend**: **Decreasing selling pressure**

  As MVRV decreases, it indicates that realized cap is outpacing the market cap meaning there is decreasing motive for selling in the market.

### **Implications of MVRV**

#### **Overvaluation and Market Tops**

<figure><img src="/files/iFl7BTwScAZwMhcLrgyQ" alt="Bitcoin MVRV Ratio - Overvaluation"><figcaption></figcaption></figure>

**High MVRV:** When MVRV values are elevated, it may signal that the current market price of Bitcoin is significantly higher than the last transaction prices. This could indicate a state of overvaluation, potentially signaling a market top.&#x20;

Analyzing Bitcoin's fair value in the context of MVRV provides essential insights into whether the current price aligns with the aggregate market cost basis.

#### **Undervaluation and Market Bottoms**

<figure><img src="/files/oYFHVhuJMCVqsGsjKzql" alt="Bitcoin MVRV Ratio - Undervaluation"><figcaption></figcaption></figure>

**Low MVRV:** Conversely, a low Market Value to Realized Value suggests that the current price of Bitcoin is relatively lower compared to the last transaction prices. This could point towards undervaluation, potentially signaling a market bottom. Investors keen on assessing the average price of Bitcoin in relation to its MVRV can use this metric to gauge potential buying opportunities.

#### **Market Sentiment and Investor Behavior**

**Fluctuations in MVRV:** Monitoring changes in the MVRV ratio over time provides insights into shifts in market sentiment and investor behavior, influencing Bitcoin's current market value. Sudden spikes or dips can indicate changing perceptions about the Bitcoin price, offering traders valuable information for strategic decision-making.

#### **Long-Term vs. Short-Term Holder Behavior**

**Divergence in MVRV:** Analyzing the MVRV for short-term holders versus long-term holders can reveal variations in behavior. A significant divergence might suggest different outlooks and strategies between these two groups of Bitcoin investors, shedding light on potential market trends.

#### **Risk Management**

**MVRV Trends:** Traders and investors can use Bitcoin MVRV trends to inform their risk management strategies. Understanding whether Bitcoin is currently trading at a premium or discount relative to its realized value can aid in making more informed decisions about the current Bitcoin price. This nuanced approach is crucial for navigating the dynamic and ever-evolving Bitcoin landscape.

### End Notes

The MVRV ratio serves as a valuable tool for assessing the relative valuation of a cryptocurrency, offering a nuanced perspective on market conditions and investor sentiment. Traders and investors can leverage this metric to make more informed decisions in the dynamic and ever-evolving cryptocurrency landscape.

## Link to Our Data

* [MVRV ratio in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/197?window=day)
* [MVRV ratio in CryptoQuant Data API docs](https://cryptoquant.com/docs/#operation/getRiskIndicatorMVRV)


# Network Indicators


# NVT Ratio

Defined as the ratio of market capitalization divided by transacted volume in the specified window.

## Definition

There are numerous indicators that traders and investors use to make informed decisions. One such indicator is the Network Value to Transactions (NVT) Ratio. In this guide, we'll delve into the NVT Ratio, understand what it signifies, and explore its applications.

$$
\text{NVT Ratio} = \frac{\text{Market Cap}}{\text{Transaction Volume in USD}}
$$

### **What is NVT Ratio?**

<figure><img src="https://images.surferseo.art/6eb00c90-1d34-4e17-9ea1-e052113407ba.png" alt="Bitcoin: NVT Ratio – Source: CryptoQuant"><figcaption></figcaption></figure>

Network Value to Transactions Ratio (NVT Ratio) is defined as the ratio of market capitalization divided by transacted volume in the specified window.

### **NVT Ratio: A Conceptual Overview**

<figure><img src="https://images.surferseo.art/1ca5d700-39c6-4f77-ac9d-c135ab6b5469.png" alt="Bitcoin: NVT Ratio, 1D – Source: CryptoQuant"><figcaption></figcaption></figure>

NVT can be seen as analogous to the PE Ratio (Price-Earnings Ratio) but applied in the crypto world. It is a measure of how investors perceive the cryptocurrency's value in relation to its utility, specifically in terms of transaction volume. The NVT Ratio helps us answer the fundamental question: Is the network's market cap justified by its transaction activity?

If the value is too high, it means the network is overvalued compared to the low ability to transact coins in terms of volume, implying the possible removal of a coming price bubble. This interpretation is based on the effect of [mean reversion](https://en.wikipedia.org/wiki/Mean_reversion_\(finance\)).​

### **Interpreting** Network Value to Transaction **Ratio**

Understanding the interpretation of the NVT Ratio is crucial. This indicator measures whether the blockchain network is **overvalued or not**. Here's how to decipher this essential indicator:

#### *High NVT Ratio*

**High Overvalued** Network Worth = **Bearish.**

A high NVT Ratio suggests that the cryptocurrency network is being priced at a premium. This often coincides with periods of market exuberance, where market cap growth outpaces transaction volume. Such periods have historically been associated with market tops and potential overvaluation.

#### *Low NVT Ratio*

**Low Undervalued** Network Worth = **Bullish.**

<figure><img src="https://images.surferseo.art/28d83bc5-b55f-4430-acd1-c4bf80556c35.png" alt="Undervalued Representation of NVT Ratio – Source: CryptoQuant"><figcaption></figcaption></figure>

Conversely, a low Network Value to Transactions Ratio indicates that the network is priced at a discount. This suggests that transaction volume and network utilization outpace market cap growth. Historically, this has been linked to accumulation opportunities and bullish trends.

#### *Stable NVT Ratio*

A consistent Network Value to Transactions Ratio signifies a balance between market cap growth and transaction volume. It often indicates that the market trend is sustainable and may persist.

### **Evolving Interpretation over Time**

The interpretation of the NVT Ratio evolves as the cryptocurrency market matures and technology advances. Factors like the Lightning Network, shifting narratives, and rising coin prices can influence how we understand the Network Value to Transactions Ratio. Therefore, it's crucial to consider historical context and analyze trends rather than fixate on absolute values.

### **Enhancing NVT Ratio Analysis**

To capture broader trends and respond to changing market dynamics, it is recommended to apply a moving average to the NVT Ratio. This offers a more comprehensive understanding of the indicator.

### **Variations of NVT Ratios**

In addition to the standard Network Value to Transaction Ratio, there are variations that provide further insights:

#### *NVT Signal (NVTS)*

This version uses a 90-day moving average of daily transaction volume in the denominator instead of raw daily transaction volume, offering a more responsive indicator.

#### *Velocity*

Velocity measures how quickly units circulate in the network. It is calculated by dividing on-chain transaction volume by market cap, effectively being the inverse of the NVT Ratio.

## Link to Our Data

* [NVT Ratio in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/198?window=day)
* [NVT Ratio in CryptoQuant Data API docs](https://cryptoquant.com/docs/#operation/getRiskIndicatorNVT)


# NVT Golden Cross

NVT Golden Cross (NVT\_GC) is a Bollinger-band-like signaling indicator based on NVT, defined as the following equation

## Definition

NVT Golden Cross (NVT\_GC) is a [Bollinger-band](https://en.wikipedia.org/wiki/Bollinger_Bands)-like signaling indicator based on NVT, defined as the following equation.

$$
\text{NVT} = \frac{\text{Market Cap}}{\text{Transaction Volume}} \\
\text{NVT\_diff} = \text{NVT (10 days moving average)} - \text{NVT (30 days moving average)} \\
\text{NVT\_GC} = \frac{\text{NVT\_diff}}{\text{NVT\_diff (300 days moving standard deviation)}}
$$

## Interpretation

NVT Golden Cross targets to generate short or long signals by comparing the short-term trend of NVT and the long-term trend of NVT.&#x20;

&#x20;This **leading indicator** predicts the appearances of local tops and bottoms, which helps traders to take their short or long positions.

### By value itself <a href="#interpretation" id="interpretation"></a>

**Predicting Local Tops and Bottoms**

* **Values over ‘2.2’** : **Short Signal**

  If the short-term trend is way greater than the long-term trend is, the network can be interpreted as overpriced and will soon revert to mean value, meaning **short signal**.&#x20;
* **Values under ‘-1.6’** : **Long Signal**

  If the long-term trend is way greater than the short-term trend is, the network can be interpreted as under-priced and will soon revert to mean value, meaning **long signal**.&#x20;

### By examining trend  <a href="#use-case" id="use-case"></a>

It shows **the comparative trend difference between long-term and short-term.**

* **Increasing trend** : Marketcap(Price) is **heating up** compared to transaction volume

* **Decreasing** **trend** : Marketcap(Price) is **cooling down** compared to transaction volume

![](/files/-MCvQBa12lvqtnkiFzlH)

## Link to Our Data

* [NVT Golden Cross in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/201?window=day)
* [NVT Golden Cross in CryptoQuant Data API docs](https://cryptoquant.com/docs/#operation/getNVTGoldenCross)


# Puell Multiple

Puell Multiple is defined as the ratio of the daily value of the issued coin in USD divided by 365 days moving average of the daily value of issued coins in USD.

## Definition

Puell Multiple is defined as the ratio of the daily value of the issued coin in USD divided by 365 days moving average of the daily value of issued coins in USD.

$$
\text{Puell Multiple} = \frac{\text{Mining Revenue in USD}}{\text{365 days moving average (Mining Revenue in USD)}}
$$

## Interpretation

Puell Multiple can be interpreted as "If all mined bitcoins were sold immediately in the market, how profitable mining pools are compared to last historical one year?" This metric explores market cycles from the global mining revenue perspective.

Miners are the only entity that requires constant cost such as running electricity. Thus, miners' behaviors are always linked to price to certain degree. Puell Multiple compares 365 days average estimated revenue with short-term revenue of miners.

<figure><img src="/files/-MCvR389AAq94fBXwq0z" alt="Puell Multiple: CryptoQuant"><figcaption></figcaption></figure>

### By Value Itself <a href="#interpretation" id="interpretation"></a>

**Predicting Price Tops and Bottoms with the Puell Multiple**

* **Values over ‘4’**: **Short Signal**

  If Puell multiple rises, it indicates that price=Miner's revenue is increasing significantly compared to the cost they put in. In this phase, bitcoin soared to point where Miner's revenue far exceeds the cost they put in. If we put regard bitcoin's true value with miners' cost (POW) and hashrate, this could indicate that bitcoin is overpriced.

  In other words, this could indicate that price is overvalued along with the increasing miner's motive to sell.

<figure><img src="/files/VeLGYZCEpE5WSKeIqocB" alt="Bitcoin Puell Multiple Short Signal"><figcaption></figcaption></figure>

* **Values under ‘0.5’**: **Long Signal**

  If the Puell multiple decreases, it indicates that price=Miner's revenue is decreasing significantly compared to the cost they put in. In this phase, bitcoin can become extremely volatile, and prices plunge to the point where miners can't handle the fixed costs of electricity from their mining hardware, making some miners stop their mining action.

  In other words, this could indicate that the price is undervalued along with the increasing miner's motive to hold their bitcoin reserve.

<figure><img src="/files/fNGVkx2ie34QX2539SzA" alt="Bitcoin Puell Multiple Long Signal"><figcaption></figcaption></figure>

### By Examining Trend  <a href="#use-case" id="use-case"></a>

It shows miners' short-term revenues relative to long-term profits.

* **Increasing trend**: Marketcap (Price) is **heating up** compared to miners' cost
* **Decreasing** **trend**: Marketcap (Price) is **cooling down** compared to miners' cost

### **Decoding Puell Multiple Framework: Market Cycles**

Let's streamline its interpretation:

#### **High Puell Multiple: Caution Flag**

* **Indicator:** Potential market top.
* **Implication:** May signal overvaluation as miners sell bitcoins at higher prices.

#### **Low Puell Multiple: Buying Window**

* **Indicator:** Potential market bottom.
* **Implication:** Opportunity for providing advantageous profit-taking as Bitcoin miners sell at relatively lower prices.

#### **Halving Events: Puell Dynamics**

* **Pre-Halving:** Expect highs as supply anticipation rises.
* **Post-Halving:** Reflects shifts in miner behavior and market response.

#### **Sentiment Gauge: Rapid Insights**

* **Indicator:** Shifts in miner sentiment.
* **Implication:** Early indicators of potential market trends.

For the strategic Bitcoin investor, combining Puell Multiple insights with other indicators is key for a nuanced understanding of the dynamic cryptocurrency landscape. As you navigate Bitcoin's economy, Puell Multiple stands as a concise guide, unraveling hidden narratives within miner activities and market sentiments—a must for strategic Bitcoin investors.

## Link to Our Data

* [Puell Multiple in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/393?window=day)
* [Puell Multiple in CryptoQuant Data API Docs](https://cryptoquant.com/docs/#operation/getPuellIndex)


# Stock to Flow Ratio

Stock to Flow Ratio is defined as a ratio of currently circulating coins divided by newly supplied coins.

## Definition

Stock to Flow Ratio is defined as a ratio of currently circulating coins divided by newly supplied coins.

$$
\text{SF Ratio} = \frac{\text{Currently circulating coins}}{\text{Newly supplied coins}}
$$

## Interpretation

Stock to Flow Ratio assumes that the scarcity of the coin drives the price of the coin. The Stock to Flow (S2F) Model, is a key metric introduced by the pseudonymous [Dutch institutional investor](https://100trillionusd.github.io/) who operates under the Twitter account “[PlanB](https://twitter.com/100trillionUSD)”. This ratio serves as a crucial tool for assessing market dynamics.

When the supply of newly minted coins diminishes, the Stock to Flow Ratio experiences an increase. Similarly, if the number of circulating coins rises, the Stock to Flow Ratio also shows an upward trend.

By analyzing the Stock to Flow Ratio chart, stakeholders can discern shifts in the market regime, providing valuable insights into potential Bitcoin price movements, economic factors and market conditions.

Put simply:

-If Newly supplied coins decrease, Stock to Flow Ratio rises.

-If circulating coins rises, Stock to Flow Ratio rises.

## Use Case

### Statistical Analysis on Stock to Flow Ratio

The original authors claim that the log of Stock to Flow Ratio is in a linear relationship with the log of the price. We reproduce the results of what they claim and as a result, shown in the figure below, Stock to Flow Ratio and price are in a linear relationship (not perfectly but in some sense) with significant statistics (p-value under 0.01, R-square over 90%).

<figure><img src="/files/-MEMVn5EK4rV32yIe6pY" alt="Stock to Flow Ratio Statistical Analysis"><figcaption></figcaption></figure>

Following the above linear statistics (trend and intercept), we can plot how closely they are related in a time-series manner. With this graph, we can recognize that the current price is in what regime recently.

<figure><img src="/files/-MEMRI4uyHpaECUtOyuD" alt="Regression model of SF ratio to the price"><figcaption></figcaption></figure>

## Why is the Bitcoin Stock to Flow Ratio Important?

<figure><img src="https://images.surferseo.art/9fa70a79-a0e5-42b9-b7fc-62a5e1b81788.png" alt="Bitcoin: Stock-to-Flow Ratio – Source CryptoQuant"><figcaption></figcaption></figure>

The Bitcoin Stock to Flow Ratio, often employed in the stock to flow model, stands as a crucial metric for evaluating the scarcity and potential future value of Bitcoin. Here's why it holds paramount importance in understanding Bitcoin's market dynamics:

### Bitcoin's Scarcity and Maximum Supply

As a finite resource, Bitcoin's total supply is capped at 21 million coins, reinforcing its scarcity. The Stock to Flow model quantifies this scarcity by comparing the current stock (existing supply) to the flow (newly mined coins). A higher ratio underscores Bitcoin's rarity, aligning with its reputation as "digital gold."

### Predicting Bitcoin's Price

The Stock to Flow Ratio has proven to be a reliable indicator for predicting Bitcoin's price movements. By historically correlating scarcity with value, this metric aids in generating BTC price predictions. Investors and analysts often use it as a tool to anticipate potential market trends and make informed decisions.

Analysts and enthusiasts frequently leverage the Stock to Flow Ratio to formulate Bitcoin price predictions. The model suggests that the decreasing rate of new Bitcoin issuance over time will drive up its value, potentially leading to higher market prices. This predictive aspect enhances its significance for traders and investors seeking insights into future market trends.

### Comparative Analysis

The Bitcoin Stock to Flow Ratio allows for comparative analysis not only within the cryptocurrency space but also against traditional assets. Its application extends beyond Bitcoin, serving as a yardstick to measure scarcity and value in various markets. This comparative approach offers a broader perspective on Bitcoin's unique position in the financial landscape.

## **Factors That Affect the Stock to Flow Model**

Several factors influence the Stock to Flow (S/F) Ratio of Bitcoin, impacting its scarcity and, consequently, its potential market value. Here are key factors to consider:

**Bitcoin Halving Events:** Bitcoin undergoes a halving event approximately every four years, this is an event where the reward for mining new blocks is halved, meaning miners receive 50% fewer bitcoins for verifying transactions. These events play a crucial role in diminishing the flow component of the S/F ratio, as Bitcoin's scarcity increases.

**Market Demand:** The demand for Bitcoin is a significant driver. Increased demand, often fueled by growing institutional interest or macroeconomic uncertainties, can influence the price of bitcoin, and, consequently, the overall stock to flow dynamics.

**Technological Developments:** Changes in the underlying technology of Bitcoin, such as upgrades or scalability solutions, can impact its supply dynamics. Technological advancements may influence how transactions are verified and how new bitcoins are issued.

**Regulatory Landscape:** Regulatory developments and legal clarity around Bitcoin can affect market sentiment. Clear regulations may attract more institutional investors, affecting both demand and the perception of Bitcoin's relative scarcity.

## End Notes

In essence, the Stock to Flow Ratio serves as a fundamental metric, encapsulating Bitcoin's intrinsic characteristics and influencing predictions about its future price movements. As a key element in the stock to flow model, it continues to play a pivotal role in shaping discussions around Bitcoin's economic model and its broader implications for the cryptocurrency market.

* [Stock to Flow in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/467?window=day)
* [Stock to Flow in CryptoQuant Data API Docs](https://cryptoquant.com/docs#operation/getStockToFlow)


# Stock to Flow Reversion

Stock to Flow (SF) Reversion is defined as a ratio of the price of BTC divided by SF ratio.

## Definition

Stock to Flow (SF) Reversion is defined as a ratio of the price of BTC divided by SF ratio.

$$
\text{SF Reversion} = \frac{\text{Price of BTC}}{\text{SF Ratio}}
$$

## Interpretation

SF reversion is an indicator that measures the relative difference between the market price and SF ratio. SF ratio so far correctly estimates the price trend, which means the price deviation from SF ratio can be an opportunity to bet. If SF reversion is too high compared to the price, the market price would be corrected soon, meaning a bearish moment.&#x20;

## Use Case

### Predicting market tops and bottoms

We first build a linear regression model of SF reversion to the price to align two variables. After aligning both in a single graph shown below, we can clearly see the deviations of SF reversion to the price and those points clearly indicate bullish (green boxes) and bearish (red boxes) regimes respectively.

![](/files/-MEMdl0bCFOw95sAzcYk)

## Link to Our Data

* [Stock to Flow Reversion in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/468?window=day)
* [Stock to Flow Reversion in CryptoQuant Data API Docs](https://cryptoquant.com/docs#operation/getStockToFlow)


# NVM Ratio

Network Value to Metcalfe Ratio (NVM Ratio) is defined as the ratio of the log of market capitalization divided by the log of the square of daily active addresses in the specified window.

## Definition

Network Value to Metcalfe Ratio (NVM Ratio) is defined as the ratio of the log of market capitalization divided by the log of the square of daily active addresses in the specified window.

$$
\text{NVM Ratio} = \frac{\ln (\text{Market Cap})}{\ln (\text{Daily Active Addresses}^2)}
$$

## Interpretation

NVM Ratio evaluates the fair value of the blockchain network by applying [Metcalfe's Law](https://en.wikipedia.org/wiki/Metcalfe%27s_law) where the law claims that the value of the network is proportional to the square of the number of active users.&#x20;

* **High values : Overvalued network**\
  \
  The network is **overvalued** by the interpretation where the price is too high compared to the low number of active addresses
* **Low values** **: Undervalued  network**\
  \
  The network is **undervalued** by the interpretation where the price is too low compared to the high number of active addresses

## Use Case

### RSI based market spotting

[Relative Strength Index (RSI)](https://www.investopedia.com/terms/r/rsi.asp) is one of the famous technical indicators measuring the relative strength of an upward trend and downward trend. We apply RSI to NVM for spotting the market's local tops and bottoms by thresholding. As you can see in the figure below, RSI of NVM quite correctly spots local tops and bottoms in a robust way.

![](/files/-MELypGFxV-bRKKXrf4a)

The settings for this analysis are the followings:

* We use a 7-day window for NVM for smoothing.
* We use a 14-day window for RSI formulation.
* We use 70% and 30% thresholds for the upper and lower thresholding.

## Link to Our Data

* [NVM in CryptoQuant Live Chart](https://cryptoquant.com/overview/full/470?window=day)
* [NVM in CryptoQuant Data API Docs](https://cryptoquant.com/docs#operation/getNVM)


# Stablecoin Exchange Flows/Indicators

Entry into Stablecoin data/indicators

| Data/Indicator                                                                                                         | Definition                                                                                        | Interpretation                                                                                                                                                                                                                                                                                                                                                                                                |
| ---------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| [Stablecoin Network Data](/cryptoquant-metrics/stablecoin/stablecoin-network-data)                                     | <p>-Type of cryptocurrency that is pegged to a fiat currency </p><p>-How stablecoin is issued</p> | <p>-Stablecoin with treasury account</p><p>-Stablecoin without treasury account</p>                                                                                                                                                                                                                                                                                                                           |
| [Stablecoin Exchange In/Outflow & Netflow](/cryptoquant-metrics/stablecoin/stablecoin-exchange-in-outflow-and-netflow) | Amount of Stablecoin deposited/withdrawn into/from the exchange wallets.                          | <p></p><ul><li>Increase of inflow            - Mostly a <strong>Bullish</strong> sign</li><li>Increase of outflow        - Mostly a <strong>Bearish</strong> sign</li></ul><p></p>                                                                                                                                                                                                                            |
| [Stablecoin Exchange Reserve](/cryptoquant-metrics/stablecoin/stablecoins-exchange-reserve)                            | The amount of the stablecoins held in the exchange addresses                                      | <p></p><ul><li><p>High</p><p>High Buying pressure </p><p></p></li><li><p>Low</p><p>Low selling pressure</p></li><li><p>Increasing trend</p><p>Increasing potential Buying power                     -<strong>Bullish</strong></p></li><li><p>Decreasing trend</p><p>Decreasing scarcity         - <strong>Bearish</strong></p></li></ul><p></p><p></p><p></p>                                                 |
| [Stablecoin Exchange Addresses Count](/cryptoquant-metrics/stablecoin/stablecoin-exchange-addresses-count)             | The number of unique addresses making inflow/outflow transactions of exchanges                    | <p></p><ul><li><p>High</p><p>Large number of investors </p></li><li><p>Low</p><p>Small number of investors </p></li><li><p>Increasing trend</p><p>Expanding interest and activeness</p></li><li><p>Decreasing trend</p><p>Diminishing interest and activeness</p></li></ul>                                                                                                                                   |
| [Stablecoin Exchange Transactions Count](/cryptoquant-metrics/stablecoin/stablecoin-exchange-transactions-count)       | The total number of deposits/withdrawals transactions of the exchange                             | <p></p><ul><li><p>High</p><p>Large number of transactions</p></li><li><p>Low</p><p>Small number of transactions </p></li><li><p>Increasing trend</p><p>Expanding interest and activeness</p></li><li><p>Decreasing trend</p><p>Diminishing interest and activeness</p></li></ul>                                                                                                                              |
| [Stablecoin Supply Ratio (SSR)](/cryptoquant-metrics/stablecoin/stablecoin-supply-ratio)                               | Defined as a ratio of the Market Cap of BTC divided by the Market Cap of all Stablecoins          | <p></p><ul><li><p><strong>Increasing trend</strong></p><p>Slowing down status of stablecoin's buying power                                     - <strong>Bearish or sideways sentiment</strong></p></li><li><p><strong>Decreasing</strong> <strong>trend</strong></p><p>Rising status of stablecoin's buying power                                     - <strong>Bullish</strong></p></li></ul><p></p><p></p> |

## How to look at indicators

This section identifies the lookout point for individual indicators. These indicators could be divided by their identity and their usefulness in trading. Each indicator utilized each feature of stablecoin, and put together, they cover multiple aspects and capture movements in stablecoin relatively precisely.&#x20;

If you want to make use stablecoin feature by figuring out

### 1) How many stablecoins came out from or into the exchange

Checking the flow into the exchange is a great way to keep track of stablecoins that could be a medium to buy cryptocurrencies or liquidity of the derivative market

{% content-ref url="/pages/-MSlWHS5PpxWoS5Mvv77" %}
[Stablecoin Exchange In/Outflow & Netflow](/cryptoquant-metrics/stablecoin/stablecoin-exchange-in-outflow-and-netflow)
{% endcontent-ref %}

### 2) How many stablecoins are in the exchange

Checking the Stablecoin Reserve in exchange helps to measure buying power in the exchange.

{% content-ref url="/pages/-MSMYubilfBGZCKCxwIU" %}
[Stablecoin Exchange Reserve](/cryptoquant-metrics/stablecoin/stablecoins-exchange-reserve)
{% endcontent-ref %}

### 3) How many stablecoin addresses or transactions are active or being made through the exchanges

Checking the active address count or transactions is a great way to determine how many addresses are participating in the movement in the price and find out the sentiment behind it.

{% content-ref url="/pages/-MSlWHAuQy09HttdejAZ" %}
[Stablecoin Exchange Transactions Count](/cryptoquant-metrics/stablecoin/stablecoin-exchange-transactions-count)
{% endcontent-ref %}

{% content-ref url="/pages/-MSlWHJUCHG9W4oIBadk" %}
[Stablecoin Exchange Addresses Count](/cryptoquant-metrics/stablecoin/stablecoin-exchange-addresses-count)
{% endcontent-ref %}

### 4) Figuring out how buying power or liquidity in the market

To figure out the power balance between the BTC and Stablecoin by market cap

{% content-ref url="/pages/-MELbcOodu3Tuk5pigc3" %}
[Stablecoin Supply Ratio (SSR)](/cryptoquant-metrics/stablecoin/stablecoin-supply-ratio)
{% endcontent-ref %}

#### It is wise to look at each indicator according to the abovementioned number.

### Note on Stablecoin Data Coverage

CryptoQuant offers on-chain data for stablecoins on ERC20 for Charts, Pro-Charts, Alerts, and API. The market cap of the stablecoins in all chains is available in the dashboard.

👉 [Click to view the dashboard](https://cryptoquant.com/analytics/dashboard/636d36c908ec7d0bd8484912).


# Stablecoin Network Data

Details about stablecoin issuing mechanism

## Stablecoin Issuing Mechanism

Each individual Stablecoin is created by an issuing company and each of these companies operates with a different issue mechanism. There are many of these but the two most common are as follows.

**Example 1**

![](/files/-MZq88MSKnr8QLm0ezZJ)

Before providing clients with the granting address, the issuing company holds a treasury address. Through the contract, the tokens are minted and held in the treasury address. Once the client sends fiat currency, the clients' tokens are moved from the treasury address to the client address and the tokens are listed as being issued. Conversely, when redeeming tokens for fiat, the tokens are sent to the treasury address and redeemed. This won't be reflected in the supply unless these tokens are burned using a contract by the issuing company. The circulating supply is calculated as tokens that have been issued to clients, ignoring the supply held in the issuing company wallets.

**Example 2**

![](/files/-MZq8KYOvG3TDe_cco_0)

In this method, there is no separate treasury address. After confirming the deposit of fiat, tokens are minted from the contract address and delivered directly to the client's address. Minting and issuance occur simultaneously. When clients redeem tokens, the burn and redemption also are simultaneous. This means that with this method, total supply and circulating supply will be the same. There are various methods for Stablecoin issuance, and we calculated supply and locate significant transactions. based upon these types of factors. In the future, mint/issue/burn/redeem will be added to our available metrics and will be defined as listed below.

| Term   | Definition                                                                                                                                                    |
| ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Mint   | Mint is a creation of new tokens that add to the supply. When tokens are minted, the total supply will increase.                                              |
| Issue  | The Issue is when tokens are delivered to clients after the deposit of fiat has been confirmed. When tokens are issued, the circulating supply will increase. |
| Burn   | Burn is a revocation of currently existing tokens that results in a decreased supply. The opposite of Mint.                                                   |
| Redeem | Redeem is an exchange of tokens for deposited fiat that results in a decrease in the circulating supply. The opposite of Issue.                               |


# Stablecoin Exchange In/Outflow & Netflow

Stablecoin Exchange Inflow is defined as an amount of Stablecoin deposited into the exchange wallets. Exchange Outflow is defined as an amount of Stablecoin withdrawal from the exchange wallets.

## Definition

**Stablecoin Exchange Inflow** is defined as an amount of Stablecoin deposited into the exchange wallets.

| Metrics          | Description                                                                    |
| ---------------- | ------------------------------------------------------------------------------ |
| Inflow Total     | The total amount of Stablecoin transferred to the exchange.                    |
| Inflow Mean      | The mean amount of Stablecoin per transaction sent to the exchange.            |
| Inflow Top10     | The total Stablecoin amount of the top 10 transactions inflow to the exchange. |
| Inflow Mean(MA7) | The 7 days moving average of mean Stablecoin inflow to the exchange.           |

**Stablecoin Exchange Outflow** is defined as an amount of Stablecoin withdrawal from the exchange wallets.

| Metrics           | Description                                                                       |
| ----------------- | --------------------------------------------------------------------------------- |
| Outflow Total     | The total amount of Stablecoin transferred from the exchange.                     |
| Outflow Mean      | The mean amount of Stablecoin per transaction sent from the exchange.             |
| Outflow Top10     | The total Stablecoin amount of the top 10 transactions outflow from the exchange. |
| Outflow Mean(MA7) | The 7 days moving average of mean Stablecoin outflow from the exchange.           |

**Stablecoin Exchange Netflow** is the difference between Stablecoin flowing into and out of the exchange. (Inflow - Outflow = Netflow)

The mean value is the In/Outflow Total divided by the Transactions Count In/Outflow.

## Interpretation <a href="#interpretation" id="interpretation"></a>

### By value itself <a href="#interpretation" id="interpretation"></a>

* **Increase of inflow** to exchanges is mostly a **Bullish** sign
* **Increase of outflow** from exchanges is mostly a **Bearish** sign

Considering the fact that moving coins costs fees, wallets outside from exchange send their coins to the exchanges for two possible reasons.

#### 1) To buy coins - Bullish&#x20;

In the case of inflow to spot exchange, it is highly likely that investors are sending Stablecoins for buying coins.&#x20;

This reason of action mostly leads to the price rise which indicates a bullish sign.

#### 2) To trade in derivatives market - volatility risk

The purpose for sending coins to derivative market wallets indicates that more trades will be happening on the derivative market. This could possibly lead to increased volatility risk as a result of increased trading activity, investors looking to take profits, and/or to rebalance to de-risk their investment portfolios. This type of action has difficulty in deciding the effect on price since coins in the derivative market could be used to open both long/short positions.&#x20;

Instead, it should be interpreted as increased volatility risk.

## Link to Our Data

* [Stablecoin Exchange In/Outflow & Netflow in CryptoQuant Live Chart](https://cryptoquant.com/asset/stablecoin/chart/exchange-flows)
* [Stablecoin Exchange In/Outflow & Netflow in CryptoQuant Data API docs](https://cryptoquant.com/docs#tag/Stablecoin-Exchange-Flow)


# Stablecoin Exchange Reserve

The amount of the stablecoins held in the exchange addresses.

## Definition

The flows of Stablecoin tokens into exchange wallets for as far back as we track. Please note that the transfer generally occurs after a certain amount of time from the contract created time.

## Interpretation

Stablecoin Exchange reserve is a collective measure of potential stablecoins that are ready to be used to buy cryptocurrencies in the market.

Stablecoin Exchange Reserve is the accumulated result of [Stablecoin Exchange Flows](/cryptoquant-metrics/stablecoin/stablecoin-exchange-in-outflow-and-netflow) which naturally follows the indications that in/outflow has. Similar to Stablecoin Exchange NetFlow's interpretation, an increasing trend in netflow indicates the buying pressure and the decreasing trend indicates the selling pressure.&#x20;

However, instead of Exchange In/Outflow & Netflow indicating the specific moment or period, Stablecoin Exchange Reserve is **easy to track the result of the entire period's movements.**&#x20;

### By value itself <a href="#interpretation" id="interpretation"></a>

It indicates the degree of **accumulated buying pressure** in the exchange&#x20;

* **High** : **High Buying Pressure**&#x20;

  A large number of stablecoins are staying in the exchange to be traded indicating high buying pressure&#x20;
* **Low** : **Low Selling Pressure**

  A Small number of stablecoin are staying in the exchange to be traded indicating low buying pressure

### By examining trend <a href="#indicating-selling-or-buying-pressure" id="indicating-selling-or-buying-pressure"></a>

It shows the **changing buying power status**

* **Increasing trend**: **Increasing potential Buying power -Bullish**

  More stablecoins are available in the exchange indicating the increasing buying power that are  ready to be used to trade which supports bullish movement
* **Decreasing trend**: **Decreasing scarcity - Bearish**

  Fewer stablecoins are available in the exchange indicating the decreasing buying power that is ready to be used to trade which supports bearish movement

## Link to Our Data

* [Stablecoin Exchange Reserve in CryptoQuant Live Chart](https://cryptoquant.com/asset/stablecoin/chart/exchange-flows/exchange-reserve?exchange=all_exchange\&window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)
* [Stablecoin Exchange Reserve in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/StablecoinGetReserve)


# Stablecoin Exchange Addresses Count

The number of unique addresses making inflow/outflow transactions of exchanges.

## Definition

The number of unique addresses making inflow/outflow transactions of exchanges.

| Metrics                 | Description                                                                      |
| ----------------------- | -------------------------------------------------------------------------------- |
| Addresses Count Inflow  | The number of the token addresses making inflow transactions to the exchange.    |
| Addresses Count Outflow | The number of the token addresses making outflow transactions from the exchange. |

## Interpretation

Considering that it costs fees to send from wallets to different number of wallets, active Stablecoin Exchange Address Count indicates the **closest meaning to the number of investors** that are involved in exchange related transactions.

This naturally leads to possible interpretation of correlating exchange address count to the level of attention of trading investors.

### By value itself <a href="#interpretation" id="interpretation"></a>

It shows whether **few or large numbers of investors** are involved in transaction.

* **High** : **Large number of investors** are accountable for [Stablecoin Exchange Flows](broken://pages/x9BmNyp8ZlL2lsE8TOUV)
* **Low** : **Small number of investors** are accountable for [Stablecoin Exchange Flows](broken://pages/x9BmNyp8ZlL2lsE8TOUV)

### By examining trend  <a href="#use-case" id="use-case"></a>

It shows the **level of Exchange Activeness & Volatility**

* **Increasing trend** : **expanding interest and activeness**

  More people are participating in stablecoin exchange flows indicating expanding interest and activeness of exchange trading leading to possible volatility
* **Decreasing trend** : **diminishing interest and activeness**

  Less people are participating in stablecoin exchange flows indicating diminishing interest and activeness of exchange trading leading to possible decreasing volatility

## Link to Our Data

* [Stablecoin Exchange Addresses Count in CryptoQuant Live Chart](https://cryptoquant.com/asset/stablecoin/chart/addresses)
* [Stablecoin Exchange Addresses Count in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/StablecoinGetAddressesCountEF)


# Stablecoin Exchange Transactions Count

The total number of deposits/withdrawals transactions of the exchange.

## Definition

The total number of deposits/withdrawals transactions of the exchange.

| Metrics                    | Description                                        |
| -------------------------- | -------------------------------------------------- |
| Transactions Count Inflow  | The total number of deposits to the exchange.      |
| Transactions Count Outflow | The total number of withdrawals from the exchange. |

## Interpretation

Considering that it costs fees make multiple transactions, active exchange transaction count indicates the **closest meaning to the number of investors** that are involved in network transaction.

This naturally leads to possible interpretation of correlating exchange address count to the level of attention of trading investors.

### By value itself <a href="#interpretation" id="interpretation"></a>

It shows whether **few or large numbers of transactions** are involved in netflows.

* **High** : **Large** number of transactions are accountable for [Stablecoin Exchange Flows](broken://pages/x9BmNyp8ZlL2lsE8TOUV)
* **Low**  : **Small** number of transactions are accountable for [Stablecoin Exchange Flows](broken://pages/x9BmNyp8ZlL2lsE8TOUV)

### By examining trend  <a href="#use-case" id="use-case"></a>

It shows the **level of Exchange Activeness & Volatility**

* **Increasing trend** : **Expanding interest and activeness**

  More people are participating in stablecoin exchange flows indicating expanding interest and activeness of exchange trading leading to possible volatility
* **Decreasing** **trend** : **Diminishing interest and activeness**

  Less people are participating in stablecoin exchange flows indicating diminishing interest and activeness of exchange trading leading to possible decreasing volatility

## Link to Our Data

* [Stablecoin Exchange Transactions Count in CryptoQuant Live Chart](https://cryptoquant.com/asset/stablecoin/chart/transactions)
* [Stablecoin Exchange Transactions Count in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/StablecoinGetTransactionsCountEF)


# Stablecoins Ratio

BTC reserve divided by all stablecoins reserve held by an exchange. This usually indicates potential sell pressure.

## Definition

BTC reserve divided by the sum of all stablecoins reserve held by an exchange.&#x20;

$$
\text{Stablecoins Ratio} = \frac{\text{BTC Reserve}}
{\text{All Stablecoins Reserve}}\\\
$$

$$
\text{Stablecoins Ratio(USD)} = \frac{\text{ BTC Reserve in USD}} {\text{All Stablecoins Reserve}}
$$

## Interpretation

This usually indicates potential sell pressure.

## Link to Our Data

* [Stablecoins Ratio in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/flow-indicator/exchange-stablecoins-ratio?exchange=all_exchange\&window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)
* [Stablecoins Ratio in CryptoQuant Data API docs](https://cryptoquant.com/docs#operation/BTCgetStablecoinsRatio)


# Stablecoin Supply Ratio (SSR)

Stablecoin Supply Ratio (SSR) is defined as a ratio of the Market Cap of BTC divided by the Market Cap of all Stablecoins.

## Definition

Stablecoin Supply Ratio (SSR) is defined as a ratio of the Market Cap of BTC divided by the Market Cap of all Stablecoins. In other words, the SSR is calculated as the ratio between the Bitcoin supply and the supply of stablecoins denoted in BTC.

$$
\text{SSR}=\frac{\text{Market Cap of BTC }}{\text{Market Cap of stablecoins}}
$$

## Interpretation

<figure><img src="https://images.surferseo.art/1bdef270-6f41-478d-a1cf-615680ae377c.png" alt="Bitcoin: Stablecoin Supply Ratio (SSR) Chart"><figcaption></figcaption></figure>

In understanding Stablecoin Supply Ratio (SSR), understanding the function of a stablecoin and its assumption should be done.

First, stablecoins play an important role in the cryptocurrency market as a fiat currency like USD in the regulated market. This is because fiat currencies like USD as a supplier of liquidity have a lot of regulation issues.

Second, Stablecoin Supply Ratio (SSR) is easy to understand metric when there is an assumption that the market is a closed system containing only cryptocurrencies and stablecoins. The relationship between BTC and Stablecoins is like seasaw and provide valuable insight on who has more weight at the moment.

### By Value Itself

This indicator shows the comparative power status between BTC and Stablecoins by comparing the market capitalization.

#### **High: Low Potential Buying Pressure**

High values mean Low Stablecoin supply compared to the market cap value of BTC indicating potential low buying pressure and possible price drop.

#### **Low: High Potential Buying Pressure**

Low values mean high Stablecoin supply compared to the market cap of BTC indicating potential buying pressure and support for possible price rise.

### By Examining Trend

<figure><img src="https://images.surferseo.art/8c1e0a28-069e-494e-8eb9-18bfe50d89e7.png" alt="Buy and Sell Signals Dashboard for SSR. Source: CryptoQuant Verified Author - IT Tech"><figcaption></figcaption></figure>

It shows the **level of Exchange Activeness and Volatility**

* **Increasing trend**: Slowing down status of stablecoin's buying power - **Bearish or sideways sentiment**
* **Decreasing** **trend**: Rising status of stablecoin's buying power - **Bullish**

#### **Note**

1. Additional stablecoins could be minted anytime disrupting the assumption that crypto market is a closed system. However, as crypto market continues to expand, additional mint would gradually lose its impact on the model.
2. As time passes, the degree of values' meaning could differ on level.

### Practical Example

Let's consider a hypothetical scenario to illustrate the Stablecoin Supply Ratio (SSR) in action:

Suppose the market capitalization of Bitcoin (BTC) is $1 trillion, and the combined stablecoin market cap is $200 billion. In this case, the SSR would be calculated as follows:

$$
SSR = \frac{ \text{Market Cap of BTC} }{ \text{Market Cap of Stablecoins} } = \frac{1,000,000,000,000}{200,000,000,000} =5
$$

#### Interpretation

A Stablecoin Supply Ratio (SSR) of 5 indicates that the market cap of Bitcoin is five times larger than the combined market cap of all stablecoins. This scenario suggests a potential low buying pressure on stablecoins, indicating a possible price drop. Traders might interpret this as a time when Bitcoin holds a dominant position, and stablecoins are relatively less in demand.

Conversely, if the SSR were, for instance, 0.2, it would signify a situation where the market capitalization of stablecoins is five times larger than that of Bitcoin. This could imply high potential buying pressure on stablecoins, supporting a possible value rise. Traders might view this as a period when stablecoins are gaining influence in the market compared to Bitcoin.

By monitoring on-chain data and changes in SSR over time, traders can gain insights into the ebb and flow of buying pressures between Bitcoin and stablecoins, helping them make more informed decisions in the dynamic cryptocurrency market.

## Link to Our Data

* [Stablecoin Supply Ratio in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/market-indicator/stablecoin-supply-ratio-ssr?window=DAY\&sma=0\&ema=0\&priceScale=linear\&metricScale=linear\&chartStyle=line)
* [Stablecoin Supply Ratio in CryptoQuant Data API Docs](https://cryptoquant.com/docs#operation/getStablecoinSupplyRatio)


# Fund Data & Premium


# Grayscale Bitcoin Trust (GBTC)

## Definition

Grayscale Bitcoin Trust is solely and passively invested in Bitcoin, enabling investors to gain exposure to BTC in the form of a security while avoiding the challenges of buying, storing, and safekeeping BTC directly.

## Why look at Grayscale?

### Insight on demand for indirect investment

As mentioned in the definition, Grayscale provides exposure to BTC while providing trading and security services and could be traded like any other securities. In addition, funds or trusts like Grayscale has limitation in fluent trading such as lock-up period. &#x20;

Utilizing this feature, keeping track of how much BTC Grayscale's BTC fund holds provides the closest meaning in finding out the degree of needs for especially certified institutional U.S. investors.&#x20;

{% content-ref url="/pages/-MSMZey5j-sC-T8GdSyd" %}
[GBTC Digital Asset Holdings](/cryptoquant-metrics/fund-premium/grayscale-bitcoin-trust-gbtc/gbtc-digital-asset-holdings)
{% endcontent-ref %}

### Insight on a different degree of demand between direct & indirect investment

GBTC premium or Discount shows the difference of need between indirect & direct investment through comparing respective prices. Difference between the price in exchange and trading GBTC stocks, it is natural to assume the premium or discount with its demand.&#x20;

{% content-ref url="/pages/-MSM\_mbPq08QvdrV1K2C" %}
[GBTC Premium or Discount](/cryptoquant-metrics/fund-premium/grayscale-bitcoin-trust-gbtc/gbtc-premium-or-discount)
{% endcontent-ref %}

## Link to Our Data

* [Grayscale Bitcoin Trust (GBTC) in CryptoQuant Live Chart](https://cryptoquant.com/asset/btc/chart/fund-data/fund-holdings?symbol=gbtc\&window=DAY\&sma=0\&ema=0\&priceScale=log\&metricScale=linear\&chartStyle=line)
* [Grayscale Bitcoin Trust (GBTC) in CryptoQuant Data API docs](https://cryptoquant.com/docs#tag/BTC-Fund-Data)


# GBTC Digital Asset Holdings

Grayscale BTC Holdings represents how much BTC Grayscale is holding for its investment. It is calculated by multiplying GBTC's shares outstanding and assets per share.

## Definition

$$
\text{Asset Holdings} = \text{Shares outstanding} \* \text{Asset per share}
$$

## Interpretation

Grayscale BTC Holdings represents how much BTC Grayscale is holding for its investment. This metric indicates the stock market's sentiment where higher the value means bullish sentiment of investors in the stock market.

This metric indicates the stock market's sentiment toward BTC

* **Higher** the value means **bullish sentiment** of investors toward BTC in the stock market.

## Link to Our Data

* [Grayscale Bitcoin Trust (GBTC) in CryptoQuant Live Chart](https://cryptoquant.com/overview?search=GBTC)
* [Grayscale Bitcoin Trust (GBTC) in CryptoQuant Data API docs](https://cryptoquant.com/docs#tag/BTC-Fund-Data)


# GBTC Premium or Discount

The percent difference between the market price (GBTC) and native asset value (BTC). Higher the premium indicates the U.S. bull market.

## Definition

The percent difference between the market price (GBTC) and native asset value (BTC).

$$
\text{Premium} = \frac{\text{GBTC price} - \text{Bitcoin per share \* Bitcoin price}}{\text{Bitcoin per share \* Bitcoin price}}
$$

## Interpretation of Grayscale Bitcoin Trust (GBTC) Premium or Discount

### **High Premium**

A high premium suggests a bullish market sentiment in the United States. This scenario indicates that investors are willing to pay more for GBTC shares than the actual net asset value of the Bitcoin it holds. Investors should be cautious as it signals a potential downside risk, and they might be paying a premium for exposure to Bitcoin.

### **Low Premium**

Conversely, a low premium indicates a bearish market sentiment in the U.S. Investors in this situation may be hesitant to pay extra for GBTC shares compared to the net asset value of Bitcoin. This scenario suggests potential upside risk, as investors may be getting exposure to Bitcoin at a discount.

### **Net Asset Value (NAV)**

The Net Asset Value represents the total value of Grayscale Bitcoin Trust's assets (in this case, Bitcoin) minus its liabilities. It is a crucial indicator of the trust's intrinsic value and provides a baseline for assessing the premium or discount.

## **Investment Objective**

GBTC's investment objective is to track the BTC market price performance, and its structure allows investors to passively invest in Bitcoin. This passive investment approach can be appealing to those seeking asset exposure without directly holding or managing the assets themselves.

### **Enabling Investors to Gain Exposure**

Grayscale Bitcoin Trust plays a crucial role in enabling investors to gain exposure to Bitcoin without directly dealing with the complexities of cryptocurrency ownership. This indirect investment avenue appeals to institutional and retail investors seeking a regulated and familiar investment environment.

### **Passively Invested with Less Fees**

Investors in GBTC benefit from a passive investment strategy, mirroring the performance of Bitcoin. This approach offers convenience and simplicity, especially for those looking to gain exposure to these assets without actively managing their investments. Additionally, the fees associated with GBTC are typically lower than directly holding and securing Bitcoin.

### **Is GBTC an Exchange Traded Fund (ETF)?**

While GBTC is not an ETF, it operates similarly as it enables investors to gain exposure to digital assets. Exchange Traded Funds, unlike GBTC, are a type of investment fund and exchange-traded product, with shares that can be traded on stock exchanges.

### **Grayscale Investments and Regulatory Compliance**

Grayscale Investments, the entity behind GBTC, has played a pioneering role in offering regulated investment products tied to crypto assets. Regulatory compliance is a key aspect, ensuring that GBTC adheres to applicable securities laws, providing a level of assurance for investors.

### **First Securities Product for BTC**

GBTC holds historical significance as the first securities product solely invested in Bitcoin. Its introduction marked a milestone in the financial industry by providing a traditional investment avenue for a digital asset.

### **Bitcoin Held by GBTC and Securities and Exchange Commission (SEC) Oversight**

The Bitcoin held by GBTC is subject to oversight by the U.S. Securities and Exchange Commission (SEC). This regulatory scrutiny adds an additional layer of assurance for investors, contributing to the trust's credibility in the market.

## Final Notes

In conclusion, monitoring the GBTC Premium or Discount provides investors with valuable insights into market sentiment regarding Bitcoin. Understanding the nuances of GBTC, its net asset value, and its role in enabling exposure to digital assets is crucial for making informed investment decisions in the rapidly evolving cryptocurrency landscape.

## Link to Our Data

* [Grayscale Bitcoin Trust (GBTC) in CryptoQuant Live Chart](https://cryptoquant.com/overview?search=GBTC)
* [Grayscale Bitcoin Trust (GBTC) in CryptoQuant Data API docs](https://cryptoquant.com/docs#tag/BTC-Fund-Data)


# Grayscale Ethereum Trust (ETHE)

## Definition

Grayscale Ethereum Trust is solely and passively invested in Ethereum, enabling investors to gain exposure to ETH in the form of a security while avoiding the challenges of buying, storing, and safekeeping ETH directly.

## Why look at Grayscale?

### Insight on demand for indirect investment

As mentioned in the definition, Grayscale provides exposure to ETH while providing trading and security services and could be traded like any other securities. In addition, funds or trusts like Grayscale has limitation in fluent trading such as a lock-up period. &#x20;

Utilizing this feature, keeping track of how much BTC Grayscale's ETH fund holds provides the closest meaning in finding out the degree of needs for especially certified institutional U.S. investors.&#x20;

{% content-ref url="/pages/-MSRfBuUPnqNjvsgX72p" %}
[ETHE Digital Asset Holdings](/cryptoquant-metrics/fund-premium/grayscale-ethereum-trust-ethe/ethe-digital-asset-holdings)
{% endcontent-ref %}

### Insight on a different degree of demand between direct & indirect investment

ETHE premium or Discount shows the difference of need between indirect & direct investment through comparing respective prices. Difference between the price in exchange and trading ETHE stocks, it is natural to assume the premium or discount with its demand.&#x20;

{% content-ref url="/pages/-MSRfBZGg6AFvl55oCu7" %}
[ETHE Premium or Discount](/cryptoquant-metrics/fund-premium/grayscale-ethereum-trust-ethe/ethe-premium-or-discount)
{% endcontent-ref %}


# ETHE Digital Asset Holdings

## Definition

$$
\text{Asset Holdings} = \text{Shares outstanding} \* \text{Asset per share}
$$

## Interpretation

Grayscale ETH Holdings represents how much ETH Grayscale is holding for its investment.     This metric indicates the stock market's sentiment

* **Higher** the value means bullish sentiment of investors are toward ETH in the stock market.

## Link to Our Data

* [Grayscale Ethereum Trust (ETHE) in CryptoQuant Live Chart](https://cryptoquant.com/overview?search=ETHE)
* [Grayscale Ethereum Trust (ETHE) in CryptoQuant Data API docs](https://cryptoquant.com/docs#tag/ETH-Fund-Data)


# ETHE Premium or Discount

## Definition

The percent difference between the market price(ETHE) and native asset value(ETH).

$$
\text{Premium} = \frac{\text{ETHE price} - \text{Ethereum per share \* Ethereum price}}{\text{Ethereum per share \* Ethereum price}}
$$

## Interpretation

**High** premium: It indicates the **U.S. bullish market** toward ETH, which also indicates downside risk.

**Low** premium: It indicates the **U.S. bearish market** toward ET&#x48;**,** which also indicates the upside risk.

## Link to Our Data

* [Grayscale Ethereum Trust (ETHE) in CryptoQuant Live Chart](https://cryptoquant.com/overview?search=ETHE)
* [Grayscale Ethereum Trust (ETHE) in CryptoQuant Data API docs](https://cryptoquant.com/docs#tag/ETH-Fund-Data)




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