On-chain analytics: What is it? Why is it important?

On-chain analytics is the practice of searching and analyzing activities, transactions, and other functions performed directly on Blockchain. This is one of the indispensable jobs for traders who want to grasp the trends and directions of the market in which to invest.

To understand more about the concept of on-chain analytics, why don’t you try spending a little time following upcoming content from AZcoin?

What is on-chain analytics?

First, we need to talk about the concept of on-chain data, which is data located on the Blockchain that describes activities, transactions, and other functions performed directly. In other words, this is one of the important bases that accurately reflects what is happening on the Blockchain network.

From here we have on-chain analytics, which specializes in searching and analyzing data located on Blockchain. This is one of the indispensable jobs for traders who want to grasp the trends and directions of the market in which to invest.

Why is on-chain analytics important?

For investors or large companies like Grayscale, MicroStrategy,… implementing on-chain analytics is extremely important because it brings many benefits such as:

• Provide transparent and authentic information: On-chain data does not lie and it cannot be changed or deleted by any individual or organization, so it will provide accurate and customer-friendly information, about the most important things happening in the market.
• Easily track market behavior in real-time: On-chain data also helps investors track market behavior quickly and accurately in real-time as well as allowing monitoring of market trends, and behavior of objects in the market, especially whales.
• Helps make investment decisions: On-chain data can help investors better understand the behavior of other investors and the factors influencing market volatility, allowing the identification of new market trends, potential investment opportunities, and risk management to make smarter investment decisions.

The best on-chain analytics tools

Right now, let us introduce to you the most effective tools to perform on-chain analytics at present:

Glassnode

Glassnode is one of the most popular on-chain analytics tools today, allowing users to easily capture important parameters such as transaction activity, price, circulation source,…

Furthermore, Glassnode also supports users to create multiple dashboards to add their favorite metrics with tokens in the platform’s list, which is extremely convenient.

Santiment

Santiment is a platform that provides on-chain data for the entire cryptocurrency market with data taken from real-time news sources, then preprocessed to bring to users.

With a fairly high reputation, Santiment can help you easily monitor market sentiment and better understand other investors’ feelings.

Messari

Messari is a platform that focuses on helping users search for on-chain data of many different projects and blockchains in the Crypto market.

In addition, Messari also provides an exclusive service that allows users to follow in-depth research articles every week, thereby identifying potential investment opportunities and assessing risks.

CryptoQuant

CryptoQuant is one of the most popular, easy-to-use on-chain analytics platforms available today, recommended for those new to the crypto market.

In addition, CryptoQuant also provides a wealth of other important on-chain data such as on-chain data about miners, long-term holders,… and more.

What should you keep in mind about on-chain analytics?

At present, performing on-chain analytics has become simpler and more convenient than ever thanks to extremely powerful support tools. However, when doing so, you should also note:

• Requires a lot of knowledge and experience: All support tools, no matter how simplified, require users to have basic knowledge as well as a multi-dimensional perspective to accurately evaluate and forecast. from the information collected.
• Compare multiple sources of information: On-chain data only provides partial information about the crypto market, other factors such as news, events, and market sentiment can also affect prices, so you need to compare and contrast information from multiple sources to get the most accurate assessment.
• Caution for data from the project’s website: Some projects will provide directly on-chain, but the numbers provided by the project are not completely accurate and need to be rechecked through different methods. different methods or tools.
• Update regularly: Because market behavior is constantly changing, information also needs to be updated regularly to act quickly.
• Risk of false data: On-chain data is not always completely correct, but it can be manipulated by investors deliberately creating fake transactions to create a virtual trend or due to other factors. Other external factors such as delayed transactions cause information to be slower than it is.

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Conclusion

So together we have come to the end of all the content related to the concept of on-chain analytics. Hope this content will be useful to you and see you again in other content from AZcoin.