What is on-chain analysis?
On-chain analysis involves exploiting public data recorded on the Bitcoin blockchain to understand market participant behaviour. Unlike traditional financial markets, all Bitcoin transactions are public and permanent — enabling the calculation of indicators impossible to obtain in equity or bond markets.
The MVRV ratio
The MVRV (Market Value to Realised Value) compares Bitcoin's current market capitalisation to the "realised price" — the average price at which each bitcoin was last acquired. An MVRV of 2.0 means all Bitcoin holders are sitting on an average gain of 100%.
Historically, an MVRV above 3.5 has corresponded to cycle peak phases (2017: MVRV > 7, 2021: MVRV > 4). An MVRV below 1.0 corresponds to capitulation and deep bear market phases. In March 2024, at the pre-halving record of $73,700, the MVRV reached 2.8 — in the attention zone but not yet in peak territory according to Glassnode data.
Long-Term Holder Supply
Long-Term Holder Supply (LTH Supply) measures the proportion of bitcoins that have not moved for more than one year. It is a conviction indicator: long-term holders have historically resisted corrections and sold during strong rally phases.
A high LTH Supply (>65%) indicates accumulation — few bitcoins available for sale. A rapidly declining LTH Supply signals distribution — strong hands taking profits. In February 2024, LTH Supply reached 67% — near its all-time high, signalling that the rally to $73,700 had not yet generated massive distribution.
Exchange flows
The number of bitcoins deposited on trading platforms (Coinbase, Binance, Kraken) is an indicator of potential selling pressure. When holders transfer their bitcoins to an exchange, it is generally in preparation to sell. Net outflows from exchanges — bitcoins withdrawn to personal wallets — signal accumulation.
After Trump's election in November 2024, exchanges lost 200,000 BTC in one week according to Glassnode — a massive accumulation signal consistent with the 28% rally observed over the period.
What on-chain data does not tell us
On-chain indicators are retrospective and probabilistic analysis tools, not predictive ones. A high MVRV indicates historical overextension but does not predict the exact timing of a reversal. BTCMACRO integrates these indicators into its weekly analyses with their primary sources.