Why Is On-chain Analysis So Popular And How To Learn It?

https://medium.com/thedarkside/why-is-on-chain-analysis-so-popular-and-how-to-learn-it-3b616848d96d?source=rss----c4037b4d8519---4

In this new article, we will tell you what it takes to become a competent specialist in the field of on-chain analysis.

Blockchain technologies have endowed the economic space with a unique feature: transparency. Now market participants can monitor financial transactions. But, if everything were so simple, then cryptocurrency market analysts wouldn’t be needed. That means there is a catch. In this new article, we will tell you what it takes to become a competent specialist in the field of on-chain analysis and we will also talk about what on-chain analysis is.

What is on-chain analysis?

Before we begin to understand the specialty, let’s take a closer look at the field itself. On-chain analysis is a special methodology used in the space of blockchain technologies. It was developed to perform 2 basic functions:

  1. research and explanation of the investor’s behavior on the market — usually they act according to certain verified schemes;
  2. forecasting changes in the price of a cryptocurrency due to analysis of blockchain data.

However, the use of on-chain analysis is not limited to these two points. With it, people can also:

  • identify periods in which it is more profitable to purchase or resell assets;
  • identify existing market systems;
  • track funds stolen by scammers;
  • predict long-term and short-term market trends;
  • monitor the actions of crypto whales, which affect market sentiment.

In other words, on-chain analysis is an important tool that helps investors, traders, and entrepreneurs navigate the world of cryptocurrencies and make more profitable transactions.

On-chain analysis and features of crypto trading

Trading in the traditional financial market is a rather unstable “entertainment” associated with constant risks and dependence on fluctuations in asset prices. Things are even more interesting in the crypto market.

Cryptocurrency is characterized by a high level of volatility, which means that it is sometimes extremely difficult to keep up with its price jumps. From time to time, crashes or rises of such amplitude occur that can either destroy or enrich the investor.

The use of on-chain analysis techniques significantly simplifies the game in the crypto market. Traders begin to see the causality of certain events and, based on this, make conclusions that may lead to profit.

Free platforms for on-chain analysis

On-chain analysis is based on metrics. Many of them are publicly available — the user does not have to pay for using data. On special platforms, people can learn the basics of on-chain analysis. Let’s take a look at some of them:

  • The Block

All the necessary information for on-chain analysis is presented in the Data section. The metrics clearly show the total transaction volumes, active and new addresses, miner income, average transaction fees, etc. On the downside, the data on this site is updated every 2 days — but this is quite enough to determine the current market trend. The platform provides access to data from the Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) networks.

  • Whalemap

On this analytical platform, there are more than 10 metrics with which users can build a complete picture of the crypto market. It offers a user-friendly interface, which is a good thing, especially for those, who isn’t an expert in on-chain analysis yet.

  • Look Into Bitcoin

Many charts on this platform are available even to unregistered users. The platform allows you to study the Bitcoin market, learn the basics of investing in the world’s first cryptocurrency, and predict prices in real-time.

What does it take to become a good on-chain analyst?

As we have already found out, the field of on-chain analysis is a very fertile ground for development in the cryptocurrency space. Let’s look at what skills an on-chain analyst should have to succeed in this specialty.

  • Ability to decipher and analyze data

A basic skill without which is very important to analytics. Cryptanalysis is built on metrics, graphs, and symbols. A competent on-chain analyst must be fluent in basic concepts and notations.

  • Understanding of the mechanics and principles of blockchain

Transaction, block, hash, address, commission, gas — these and other words should be familiar to an on-chain analyst.

  • Knowledge of Python and SQL programming languages

Special programs save time and simplify the work of analysts, but in order to use them analysts should have some programming skills.

  • Financial literacy

It is impossible to navigate the space of the blockchain economy without understanding the basics of the financial system.

  • Attention to details

In the blockchain environment, everything consists of nuances and details. Operations or systems that seem similar at first glance may have different specifics and perform different functions. The goals of such systems may also differ, and in this case, it is very important to be able to explore the nuances and go into detail.

Conclusion

The growing popularity and demand for on-chain analysis techniques in today’s digital landscape underscore their pivotal role in understanding and navigating the complex world of cryptocurrencies.

As blockchain technology continues to evolve, these techniques provide invaluable insights, enabling investors, researchers, and enthusiasts to make informed decisions and predictions within the volatile cryptocurrency markets. The ability to dissect transactions, trace assets, and detect patterns in real-time not only enhances market transparency but also fosters a more secure and trustworthy ecosystem for all participants.

The easiest way to buy, sell, or exchange coins is to use SimpleSwap services.

If you want to learn more interesting facts about crypto then check out our blog! You might like our articles “6 Things to Do Before Crypto Bull Run” and “Extended Reality Explained”.

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.


Why Is On-chain Analysis So Popular And How To Learn It? was originally published in The Dark Side on Medium, where people are continuing the conversation by highlighting and responding to this story.

What to Expect From Litecoin Halving?

https://medium.com/the-capital/what-to-expect-from-litecoin-halving-eb804fe30074?source=rss----c4037b4d8519---4

The halving date for one of the oldest cryptocurrencies, Litecoin (LTC), is approaching — it should take place on August 2, 2023.

Halving, or block reward reduction, is a very important event in the crypto space. This happens when the number of new coins issued for each found block is reduced by half. Thus, halving is a way to control inflation and maintain the value of cryptocurrency. The halving date for one of the oldest cryptocurrencies, Litecoin (LTC), is approaching — it should take place on August 2, 2023.

Halving in cryptocurrencies

Why is halving considered to be such an important thing? Because it has a direct impact on the rewards of miners who earn cryptocurrency for verifying transactions and adding blocks to the blockchain. The decrease in block reward means that miners will earn less cryptocurrency for their work.

The process of halving can happen with all cryptocurrencies that are based on Proof-of-Work (PoW) consensus. This includes, for instance, Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), and others.

Halving positively influences the cryptocurrency. It can lead to a decrease of the cryptocurrency in the market, which helps to increase its value. This is what happened to BTC in 2016 and 2020 — a decrease in the block reward caused an increase in its value.

Moreover, halving motivates miners to do their job and to look for new and more efficient ways to do it, which may lead to the development of technology and new innovations in the crypto industry.

Litecoin Halving

Halving helps to reduce inflation. When it comes to Litecoin, the halving process occurs every 840,000 blocks. It happens about once every four years. Each time, the reward was halved: in 2011, miners received 50 LTC per block, in 2015–25 LTC, and in 2019–12.5 LTC.

In the traditional economic system, the government can print money in different amounts to keep inflation down. In the cryptocurrency market, this is impossible, so halving has become the only way to contain the depreciation of coins. This process will continue until the miners receive all the coins — 84 million. According to rough calculations, this will happen in 2140.

How will halving affect the rate?

In 2015 and 2019, Litecoin behaved in the same way — a few months before the planned halving, the rate rose sharply, but then also fell sharply. Some experts suggest that history may repeat itself in 2023. For example, according to TradingView, before its first halving, LTC bottomed in just 122 days, then rose by 820%, and after the halving added 14200%. In 2019, the picture was not much different — the coin bottomed out in 243 days.

Conclusion

Halving is an event that can not only affect the further growth dynamics of the Litecoin rate but also be one of the key factors of the long-term stability and development prospects of the project. After the halving, inflation in the network decreases, and if the demand for the coin remains high — an increase in its price may occur.

If you want to learn more interesting facts about crypto then don’t forget to check out our blog! You might like our articles “Blockchain Types Explained” and “Top 5 Crypto Trading Strategies”.

The easiest way to buy or exchange coins is to use SimpleSwap services.

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.

Originally published on our Publish0x blog.


What to Expect From Litecoin Halving? was originally published in The Dark Side on Medium, where people are continuing the conversation by highlighting and responding to this story.