On-chain analysis helps determine the market sentiment using data from a blockchain ledger. This information helps inspect transaction data and crypto wallet balances, which are helpful when deciding whether or not to invest. Also, insights about the overall sentiment and behavior of others in the network can be obtained by analyzing this-chain data.
Transaction count provides a measure of activity taking place on a network. One can analyze the activity changes over time by plotting the count for predefined periods or by using moving averages. With this, the transaction values can tell the user how much value has been transacted within the period. A consistently high transaction value shows that the crypto is in steady circulation.
Hash rate measures network health in cryptos based on the Proof of Work mechanism. The higher the hash rate, the more difficult it is to mount a 51% attack successfully. However, with the growing interest in mining due to the availability of cheap overheads and higher profits, this rate could increase over time, giving positive signals. Conversely, a decrease in hash rate could mean that miners are going offline.
Fees reflect the demand on the blockchain. Assessing fees paid over various periods can suggest how secure the coin or token is. When fees are high, and the reward is not adjusted, crypto miners would begin working at a loss and start dropping off the blockchain.
2/3: PROJECT METRICS
3/3: FINANCIAL METRICS