How do I analyse Bitcoin’s on-chain behaviour?

A bitcoin coin stands next to a magnifying glass on a wooden table

In our search for new insights about Bitcoin, data analysis can serve us well. In this article, we will do a little data analysis together. The focus will be on the relationship between bitcoin price and transaction volume.

Do your own research is a popular motto in the crypto sector. Both here on BTC-ECHO and in the BTC-ACADEMY, we strive to equip our readers with the necessary Bitcoin Era tools and to share our insights. Our Discord, as a contact point for the BTC-ECHO community, is also a source for such own research.

But own research also includes a sober look at the raw data. The responsible crypto-citizen should always be a bit of a data analyst. In the last article, we took a first step in this direction: In the first part of this series, I explained how interested parties can download and work with price data. With TradingView and APIs like the one from Coingecko, investors and analysts are already getting very far. They can look at Bitcoin & Co. prices according to common rules of technical price analysis and study new metrics and indicators. You can also study investment strategies such as dollar cost averaging (regular investments in smaller, fixed dollar amounts) and taking advantage of seasonalities, or create a portfolio based on several cryptocurrencies.

However, the course does not take into account a special feature of cryptocurrencies: thanks to the public nature of blockchains, every analyst can take a look on-chain himself. How many transactions were there on the blockchain? How full are the blocks? Such questions can be answered by analysts with a look on-chain. In this article, we would like to explain a few ways in which APIs can be used to obtain such data. As explained in the last article in the series, we use R for this purpose.

A second goal of this article is to create a small explorative data analysis together. We will therefore start with data acquisition and play with the relevant data together. Let’s see what we find out in the process.

Sophisticated bitcoin data from Coinmetrics

For a first look at data beyond just price action, Coinmetrics does a good job. Coinmetrics is a company that focuses on crypto-related analysis. Their analyses have been discussed in various articles in the past. In addition to these insights, Coinmetrics provides the community with a large amount of data that can be the first step for many analyses.

Even those who don’t want to get started with R right away can get started on their platform. Under this link, interested parties can reach a frontend in which various data can be viewed with regard to their development over time.