The analysis company CryptoQuant, like Chainalysis, offers some pretty exciting charts. Among others this one: A simple chart, the black line shows the course of the Bitcoin price, the blue line the total of all coins on the Bitcoin exchanges. Well, at least what is known. So absolute values can’t be derived from the blue chart, but since the chart is historical, i.e., it goes back a long way and is presented in conjunction with the course of the Bitcoin price in the same image, it does say something; relatively. And compared to the Bitcoin price, the holdings on the Bitcoin exchanges are decreasing. This means that the Bitcoin exchanges have fewer and fewer coins on the tradable markets.
What does this specifc chart tells us? With a little imagination, a lot. Perhaps customers prefer to store the coins in their wallets rather than holding them on the exchange itself. Or maybe the Bitcoin exchanges simply don’t have as many coins as they did in the past. If this is the case, then this is definitely a sign that a large price increase will soon follow. Because one thing is clear, when supply becomes scarce, prices rise. If you can then still sell the coins. Because if a market is completely dried up, this can become difficult. This is known from so-called rug pulls, i.e., fraudulent altcoins, which crash the market in collusion. However, this is highly unlikely to be the case with Bitcoin. Much more likely is that a Bitcoin, in this specific scenario, will gain a lot of value at least in the short term. Because not only the technology but also the infrastructure is there for Bitcoin trading. There are Bitcoin exchanges, marketplaces, websites, groups, forums. And then also the Bitcoin meetings IRL (In Real World) as well as Bitcoin or blockchain streaming from space, etc. Pretty resilient and redundant the whole thing and this over time.
In short, Bitcoin remains exciting, especially with these chart analyses and thought experiments. Anyone interested in such charts should definitely familiarize themselves with a service like CryptoQuant in addition to the industry leader Chainalysis:
CryptoQuant: Data Analysis for Cryptocurrency Investors
The growth of the cryptocurrency industry has increased the need for precise data and analytical tools for investors and traders. One company that has positioned itself in this niche is CryptoQuant. Here we take a look at what CryptoQuant has to offer its users.
CryptoQuant is a data analysis and research tool for cryptocurrencies. The platform offers a wealth of data, charts, and indicators for various cryptocurrencies, especially for Bitcoin. By combining on-chain and market analyses, CryptoQuant provides users with insights that help them make informed trading decisions.
Main features of CryptoQuant
- On-chain analysis data: This data provides insights into activity on the blockchain itself – from the number of active addresses to transaction volumes. This information can provide clues about general activity and interest in a particular cryptocurrency.
- Market indicators: CryptoQuant provides various market indicators that help users better understand trends and movements in the crypto market.
- Tracking of major investors (“whales”): One of the key aspects for many cryptocurrency traders is understanding and tracking the activities of major investors. CryptoQuant offers tools that allow users to track these “whale” activities to detect possible market manipulation or large buy and sell movements early on.
Risk management: In addition to trading data, CryptoQuant also offers risk management tools that help traders better control their exposure and potential losses.
Why CryptoQuant is important
In a market as volatile and unpredictable as the cryptocurrency market, data is crucial. By offering detailed on-chain and market analyses, CryptoQuant helps to counteract information asymmetries and provides traders and investors with a clearer and better understanding of the market.
CryptoQuant has established itself as a reliable tool for cryptocurrency investors and traders. With a wide range of data and analytical tools, the platform enables its users to make better-informed decisions in an often chaotic market environment. In a world where information means power, CryptoQuant is at the forefront of providing investors with the data and tools they need.