Consider a situation where you perform technical and fundamental analysis on the currency of your choice in an utterly moral way and predict with a very high probability that this currency has an excellent upward trend ahead. This conclusion encourages you to buy that currency. Everything is fine. However, it may go against your prediction. In the digital currency market, joint analysis is not enough, and it is better to check the data available on the blockchain, such as the activity of whales, miners, etc., to get better results so you can earn more. A whale is a trader with a large amount of digital currency and can influence the market by buying and selling. A significant part of such analysis investigates the behavior of whales and people with substantial assets. Such research is related to the digital currency market, which several websites, including the CryptoQuant site, have provided a platform for doing it.
As you can see, to succeed in different financial markets, you must raise your knowledge about that market and constantly update your understanding of this field. The digital currency market is new, and we see new features and possibilities in this market every day. If you are going to stay in this market and make a good profit, you must get to know the details of this market.
Such analysis and technical and fundamental analysis can increase the probability of your success, but maybe acquiring skills in various studies seems a bit confusing. For this reason, it is recommended not to neglect to participate in a digital currency training course to develop skills in the shortest possible time. By participating in these courses, available to everyone today in person and online, you can use the skills and experience of leading professors and get closer to success in the digital currency market.
What is On-chain analysis?
On-chain analysis is a type of analysis in which the blockchain network, the infrastructure for data transmission in the digital currency market, is analyzed. For example, in this type of analysis, the number of active addresses, network hardness, hash rate, and items related to blockchain and transactions are checked and placed in graphs for user analysis on several platforms.
One of the most famous platforms allowing users to perform such analysis is the CryptoQuant website, which we intend to teach in this article and introduce some of its most valuable indicators.
Do not forget that such analysis or any other type alone cannot give you a powerful signal to enter or exit the trade. As a result, it is recommended to learn all the applied analytics and use them together to make more of your predictions come true.
Use of the CryptoQuant site
Activity in financial markets requires knowledge and, of course, correct information. Even the best analyst cannot profit well in any financial market without a price chart and incorrect information. As a result, a reliable source for analysis is necessary for every analyst and capital market activist. For example, the TradingView website is a very reliable and robust resource for technical analysts.
In this article, we intend to review the CryptoQuant website, a reliable source for such analysis. As a result, if you want to do such an analysis, you can easily use the CryptoQuant website and its handy indicators, thus increasing your profit in the market and operating with more confidence.
• Analysis
Previously, we provided explanations about On-Chain analysis. The CryptoQuant website is one of the reliable sources for this type of analysis by providing various indicators.
•Collecting data
Statistical data and charts presented on many websites are not valid. F, access to a reliable and acceptable site, such as Cryptocoin, is essential for someone who intends to use and publish or provide accurate information. Users can take pictures of different pages of this website to use the indicators they need in their articles and speeches.
• Strategy design
To design a trading strategy, the price behavior of the desired currency should be checked in different situations. For example, you can pay attention to the network difficulty index or the flow of liquidity entering and leaving the exchange and find them at other times by changing the amount of entering and exiting and checking the price at those times and specific behaviors in each digital currency.
By doing this, you probably conclude that the currency price will increase as the number of coins leaving the exchange increases. As a result of this situation, the withdrawal of currency from the exchange to the wallet, if it continues for some time, can signal the beginning of the growth of the currency price. Likewise, you can apply different indicators to different currencies and recognize recurring behaviors in them to analyze the future of that digital currency.
How to register on the CryptoQuant site
Registering on the CryptoQuant site is very simple. Go to the platform and start writing by clicking on SIGN UP. Of course, if you already have an active account and want to enter it, you must click on the SIGN IN option.
Another thing that exists is the background color of the screen, which you can choose a day or night theme according to your wish. If you click on the moon icon in the image, the night theme will appear with a black background.
After clicking on the SIGN-UP option, you must enter the required information in the relevant boxes, which include your email address and username, and choose a password and referral code, if any. A referral code is a phrase that contains a few characters. If you receive and enter it during registration, you can get privileges and discounts using the relevant platform. Using the referral code is optional. Finally, after confirming that you have accepted the rules of the crypto coin site, click on the SUBMIT option.
After registration, an email containing an activation link will be sent to you, and by clicking on it, your account will be active and ready to use. Also, when you log into your account for the first time, you will be asked questions to know what type of trader you are; you can skip these steps without answering these questions. For this, click on the Skip option, and if you want to answer the questions, click on the Get Started option.
The work is done, and you can use the beneficial information and indicators of the CryptoQuant website to make better profits, but one thing you should keep in mind at the beginning is that the charts are applied to Bitcoin by default. You can select the desired currency from the box shown in the image and click on the two opposite arrows.
You can also find your desired index from the search box and apply it to your preferred currency. As you can see, the number of indicator categories is huge; each contains several indicators within itself. For example, the Exchange Flows category alone has 18 indicators.
• Dashboard of Cryptoquant
For quick access to the indicators you always use, a section on the CryptoQuant site allows users to choose the hands they want from many indicators on the site and place them in that section. To do this, click on the Dashboard option on the top bar and then click on the blue Add New Chart option, also indicated in the image from the page that appears before you.
After clicking on Add New Chart in the last step, a menu like the one below will appear in front of you, which contains the first option, the digital currency, and the second option of the desired index, which you can choose based on your needs and finally click Click the blue Add option at the bottom of the page. Of course, you can include more items such as timeframe, exchange, chart type, and other items in this section.
• Pro Chart of Cryptoquant
Access to this section is not free, and you need to upgrade your account to use it, but anyway, Pro Chart refers to professional charts provided by the Tradingview website. Applying different indicators on the chart in this section is also possible.
Also, users can publish their analysis in this section or, if they wish, use the charts and the study of other prominent analysts, thus increasing their chances of success. If you intend to use the services of this section, click on the Upgrade Now option, which is also indicated in the image.
• Alert
If you have designed your trading strategy and are looking for the right points to open or close trades, this section of the CryptoQuant website will significantly help you; it is irrational to check the status of the working currency every moment.
Also, according to the characteristics of the digital currency market, the price or conditions may change at once, and in this way, you will be left out of the market profit. To prevent this situation, it is possible to use Alert for users. In the following, we explain how to use this section in full.
First, after logging in to the user account, click on the Alert option from the top bar, and then on the page that appears to you, click on the + New custom alert option. After clicking on this blue option, a page will be displayed where you must enter the alert conditions (Alert) you intend to create in the relevant boxes.
First, you must choose your desired digital currency, Bitcoin. In the Metric box, the desired indicator is selected and placed (the choice of this indicator depends on your trading strategy). For the Exchange section, which means an exchange, you can choose all discussions or a specific business so that the index is applied to it and the created Alert works according to the status of this exchange.
In the Resolution section, you can also tell the CryptoQuant website to collect information at what intervals. It is possible to choose daily hourly intervals for each block. Of course, if you intend to select a block or time interval, you must upgrade your user account. In the Condition section, you should consider the conditions that are important to you. In this section, you can choose Above and Below.
The Condition section can be placed above or below the Threshold Value in the following area. In the Cool Down section, you also determine when the warning will be repeated; For example, every 5 minutes, every 10 minutes, or every 1 hour.
Finally, in the Channels section, you can choose how the alerts will reach you. Here, users can select Telegram, Email, and Browser Notifications. Choose your desired option and finish creating your first Alert by clicking the blue Add option.
The notifications in this section may be available with a few minutes delay due to the time required to verify the blocks.
• Quicktake
In this section, you can check the analysis of different people. Of course, sharing your comments in this section is also possible. Using others’ research is beneficial because you can get to know the indicators that others use in their analysis and how to get signals from those indicators. It is also possible that other users have noticed very profitable conditions that you have overlooked.
• Pricing
As you already noticed, access to information on the CryptoQuant site is categorized for users with different levels. This means that people who use the free services of this website will not have access to some benefits of the CryptoQuant site by being placed at the Basic level.
Users on the CryptoQuant website will have access to 4 different user levels; we will describe below the conditions of each class for you to change your status from Basic to one of the other levels if you wish.
• Basic
This user level is suitable for small traders or those interested in the digital currency market who want to use the data and statistical information of the cryptocurrency site for their analysis and other purposes. This user level is free. Of course, users only have access to the knowledge of the last three years, and it is impossible to check the index in time frames below 24 hours. The impossibility of applying multiple alerts and using Cryptocoin site API are other limitations of this website for the Basic user level.
• Advanced
The Advanced user level, which is still helpful for retail traders, provides users with more updated information for a fee. The payment amount for advanced users is calculated in two modes. If you decide to pay for this user level once, in other words, annually, the cost of using CryptoQuant site services will be calculated at $29 per month.
In other words, you pay $348 (12*29) once and use the site’s services for one year, but if you intend to pay gradually and monthly to use the services of the CryptoQuant site, you must pay $39 a month.
In this user level, the information is updated for you up to one block, and as an Advanced level user, you have the right to apply five alerts. Using knowledge about the entire history of digital currency is another advantage of this user level.
• Professional
As the name suggests, the Professional user level is designed for professional traders and experts. The information is updated up to one block, and users can apply 20 alerts. There is access to the entire cryptocurrency history and the right to use 800 API requests with one-day updates for user platforms. Still, using such services is not free, and you need to pay $109 per month to the Cryptocoin site to take advantage of such a level of service. Of course, if you decide to pay the area for 12 months at once, the cost of using this site will be calculated for you at $99 per month.
• Premium
The Premium user level, which provides users with the highest quality and facilities, is mainly used by highly professional traders and companies. It is possible to use the services of this level by paying $799 annually, and users of this level cannot pay the fee monthly.
Application of 100 alerts, unlimited use of the Pro chart section, and API are other services of the CryptoQuant site intended for users of this level.
What is an API?
In the user levels section of the Cryptocoin site, we came across a concept called API, which is one of the features of the Cryptocoin site for some user levels. In this section, we explain the concept and application of API in simple language so that possible ambiguities disappear.
In simple words, API can be an interface between different sites to use services. For example, if someone gets the API of the Cryptocoin site, they can provide the use of the Cryptocoin site services to their website users. We see similar situations in many economic areas where, for example, a person receives the instant price of digital currencies from a reference site and displays it on his website with the help of an API.
Introducing the application indicators of the CryptoQuant website
Cryptocoin site indicators are handy; However, their number is very high, and it is impossible to review them all in this article. In the following, we have described some of the most valuable indicators and how to get signals from them.
• Exchange Reverse in Cryptoquant
This indicator provides an analysis according to the number of bitcoins accumulated in exchanges. The blue graph refers to the number of bitcoins in the business, While the black chart shows the price chart of Bitcoin, which you can see on any analysis site (such as Trading View).
In simple words, it can be said that when the blue chart is bullish, the number of bitcoins in the exchange is increasing, and if it is decreasing, it can be noted that bitcoins are being transferred from the business to the wallets. These two graphs do not correlate with each other in most places and move in opposite directions.
When traders and investors transfer their assets, which can be Bitcoin or any other digital currency, from the wallet to the exchange, it is understood that they intend to sell their coins. As a result, with the increase in this item, we can expect an increase in supply. As a result, a price decrease. On the contrary, when market participants transfer their assets from the exchange to personal wallets, the number of people who intend to sell their support is expected to decrease. As a result, the demand and Then the price will go up.
Signal: From this index, it is understood that with the upward movement of the blue graph, there is a possibility of a downward trend, and if the blue chart or the Exchange Reserve index decreases, we will probably have an upward trend ahead.
• Exchange Netflow in Cryptoquant
In this index, the black chart is the price chart of Bitcoin (of course, you can also use this index to analyze other digital currencies). The red and green bars show the entry and exit of currency (here Bitcoin) to the exchange. The green bars show the admission of Bitcoin into the business, While the red bars indicate the withdrawal of Bitcoin from the sale.
When people transfer their bitcoins from the wallet to the exchange, they intend to sell it. As a result, the supply increases, and the price decreases. This situation occurs when there are many green bars with a high height. As a result, in this index, we can expect a price decrease when the green bars appear consecutively for some time and are more powerful (higher) compared to the red bars in the same period.
The reverse of these conditions can also be established, and we can witness the price growth in the currency. The number of bitcoins transferred from the exchange to the wallet must increase for the price to go up. If we want to find such conditions in the Exchange Netflow indicator, we should look for situations where the red bars repeat with greater height and strength than the green bars.
As you can see in the figure below, the red bars appeared continuously for some time at a suitable height So that their presence and intensity could be recognized compared to the green bars. In such a situation, we can expect a price increase, Something that also happened to Bitcoin, and this currency was able to experience a significant rise.
If this indicator and chart are complicated for you or you want to check the entry and exit of Bitcoin for a specific time frame, you can click and drag on the chart page to review the indicator more clearly and in a particular time frame.
As you can see in the figure below, the bars are displayed with greater clarity and for a time frame, allowing for a more accurate review of that time frame. Of course, there are two levers at the bottom, left and right of each indicator, and by dragging these two levers, you can choose the time frame you want.
In the Exchange Netflow index, you can see the result of Bitcoin inflows and outflows from exchanges; with the help of this index, the average flow to the business is provided to you more comprehensively, but if your trading strategy is designed in such a way that only the inflow or outflow is you need to withdraw Bitcoin from the exchange, you can use the two indicators that we will provide below.
Exchange Inflow
The Exchange Inflow indicator examines the flow of Bitcoin to the exchange separately. Again, the black line shows the Bitcoin price chart, and the green bars show the volume of Bitcoins transferred from the wallet to the business.
In the explanation of this indicator, it should be said that when bitcoins are transferred from the wallet to the exchange, if they are exchanged in spot transactions, they will cause the price to decrease, but if the bitcoins transferred from the wallet are entered into derivative transactions, the fluctuation They create and will not shape a long-term trend for Bitcoin.
Since transferring coins from a wallet to an exchange will involve a fee, this is usually done for the following purposes:
• Selling coins, which causes a downward trend.
It is for trading in derivative transactions that cause fluctuations in the price.
• Sometimes, investors transfer Bitcoin or any currency from their wallet to the exchange for purposes such as participating in airdrops, staking, and similar activities, which will not affect the price chart.
Investors withdrawing Bitcoin from the exchange to the wallet may do this with two goals.
• Transfer of bitcoins from the exchange to the wallet after the purchase, which, if this move is made in cash transactions, can be a sign of a price increase because the buyers intend to keep the purchased coins at least for a while (due to the transfer fee, This will be done for a specific purpose).
• The transfer of bitcoins that are no longer needed in derivative transactions is done by traders when the trader earns a profit or transfers his bitcoins from the exchange to the wallet to reduce the risk of his portfolio. The result of this work can be to see fewer derivative transactions and, as a result, fewer fluctuations in the market.
• CDD (Coin Days Destroyed)
This index on the CryptoQuant site is obtained by multiplying the amount of Bitcoin by the number of days that Bitcoin or Bitcoins were held in the wallet and were not spent. For example, if an investor keeps ten units of Bitcoin in his wallet for 180 days and does not transfer it, the calculated Coin Days for this transaction after 180 days is 1800. In contrast, if a person keeps ten units of Bitcoin in his wallet for 20 days and then transfers Bitcoin or, in other words, spends Bitcoin, the number of Coin Days for this transaction will be 200.
You see, the number of days that Bitcoin remains in the wallet as unspent is also essential in this index, and the amount of Bitcoin is not the only component in its calculation.
Coin Days shows the lifetime of Bitcoin in a transaction, which, according to many experts, is very important Because the decision to transfer Bitcoin when it is made by a person who has held his property for three years is not the same as a person who has kept his property for only one week, and each has a different value. Destroyed means destroyed, and in this indicator, it also refers to the destruction of Bitcoin or its spending in the transaction, but let us explain the method of using this indicator in transactions.
First, you should know that checking this index daily does not give you specific information, and it is better to check the CDD index over time. Big investors are always looking for profit by buying assets at low prices and selling them at high prices.
As a result, it can be concluded from this way of thinking and the type of investment that if the CDD index registers high values, it can be supposed that long-term investors have reached their goal of gaining profit or have decided to create a balance in their portfolio. In such a situation, this group of investors will sell and offer their bitcoins, and as a result, we can expect a price drop after that.
If bitcoins are transferred from the wallet to the exchange for selling, we will probably face supply and subsequent price reduction, While if bitcoins are transferred from one wallet to another, they do not decrease in price. For this reason, we have different conditions for this chart, and it is said that you should never use even the best indicator and indicators alone in your analysis.
If the recording of high values in this index is gradual, as seen in uptrends, the whales are probably selling their assets to investors in demand created in the uptrend. As a result, the price and the CDD index both have an upward trend, and then we will see a drop in the price.
The gradual decrease of the CDD index also means that people have chosen to be holders, and it can also be assumed that the number of hodlers is increasing. This state is mainly observed when there is a correction in an upward trend; we can usually expect a price growth after such a situation.
The low values of this index also show that holders are not interested in selling their assets, which can be one of the necessary conditions for the price to rise. Of course, a low amount of CDD can also indicate a decrease in the activity of whales.
Signal: A gradual increase in the index will follow a downward trend, and a gradual decrease in the index will follow an upward trend. A high level of this index can be a price drop, and a low level can be a sign of a price increase.
• Puell Multiple
The Puell Multiple index is another valuable index of the CryptoQuant site in such analysis that it expresses the daily value of Bitcoin compared to the last 365 days. Many Bitcoin or any other digital currency owners sell all or part of their holdings when they can make significant profits over a year. In such a situation, we will face an increase in supply and a subsequent increase in sales pressure, resulting in a price drop.
In general, the rise of the Puell Multiple shows that miners’ income is high considering the costs they have to pay for mining. In such a case, if we measure the price of Bitcoin with the payment of miners and the amount of hash rate, we will find that Bitcoin is being traded at a figure higher than its actual value, which can encourage miners to sell and, as a result, increase the supply, and following this We can see the price drop.
But if the situation is opposite to what we said, the miners’ income is meager considering the cost they pay. This situation continues until some miners turn off their miners due to their inability to pay for electricity.
This situation shows that Bitcoin is being traded at a figure lower than its actual value, and in such a situation, miners keep the mined Bitcoins, which can increase the price due to a decrease in supply.
After getting familiar with this index, we should be able to use the information of this index in our transactions. To use this index, it is necessary to pay attention to the two numbers 0.5 and 4 on the left vertical axis of the index. If the indicator falls below 0.5, we can expect a bullish trend in Bitcoin, but if the hand exceeds 4, it is a sign that Bitcoin is preparing for a bearish trend.
Signal: If the index reaches above 4, a sell signal is issued, and if it reaches 0.5 and below, a call to buy Bitcoin is given.
• Funding Rate
Funding Rate is an indicator that moves according to Perpetual transactions. Of course, the use of this indicator on the cryptocurrency site is not limited to Perpetual traders, and other people can also predict the future of the currency trend with the help of this indicator.
If we first want to explain the concept of funding rate briefly, we must say that by using funding rate, convergence is created between cash transactions (Spot) and future transactions (Future). The price in the cash and futures market is slightly different, and when the maturity date of the traditional futures contracts is reached, these prices are close to each other.
Futures can be traditional or Perpetual, the difference between which is the existence of an expiration date for conventional futures. However, the price must be controlled somehow in Perpetual lots, where there is no expiration date. For this purpose, the exchanges that have made Perpetual transactions possible for their users have adopted a policy in which Perpetual traders pay each other an amount for price control, and the business will not have a share of this amount.
If the Funding Rate is positive, i.e., above zero, it means buyers’ dominance. Those who have repurchase Perpetual transactions have to pay an amount to the holders of resale transactions, which causes some buyers to close their transactions for non-payment or to open a sell transaction (you must know that buying transactions create high demand and Then it causes the price to increase, while sales transactions will result in high supply and then a price decrease).
But if the funding rate is negative, the situation will be the opposite. In such a situation, the sellers have taken over the power and caused supply in the market. In such cases, the sellers must pay the holders of Perpetual repurchase transactions to balance the need. As a result, some sellers try to close their deals, and some may open purchase deals to receive the amount that will compensate for the price drop.
After understanding the concept of Perpetual, let us also explain the use of this indicator. This index is placed in the Derivatives category. As it is apparent in the figure, when the funding rate is positive (this state is shown by the green bars in the index), buyers must pay an amount to sellers. As a result, we will see a drop in the price due to some traders’ closure of purchase transactions.
Also, when the Funding Rate is negative, the sellers must pay an amount to the buyers, which will increase the price due to the mentioned reasons.
Signal: A positive funding rate will usually lead to a downward trend; If the funding rate is negative, it shows an upward trend.
final word
The digital currency market has differences from other financial markets, which has caused the analysis in this market to require different information and data in addition to standard data with other markets. Such research, which is only specific to the digital currency market, is provided by some platforms, and the CryptoQuant site is one of the best sources for performing this analysis. In this article, we tried to describe the Cryptocoin website and some of its most valuable indicators so that you can use this handy website in your analysis and get better transaction results.