![]() It can be observed from the curves that while the number of inflows is volatile, the correlation between the two metrics is still strong. We calculate the number of daily inflow transactions and plot them against the Ether price. Using the TokenAnalyst API, we get all inflows of the last two years into the six above mentioned exchanges. We call transactions into exchanges inflows, while the transactions leaving the exchanges are called outflows. We first look at the number of transactions to exchanges. To limit the scope of our research, we focus our attention on Ethereum on-chain flows (from the TokenAnalyst Exchange API) to and from Binance, Bitfinex, Bittrex, Kraken, Kucoin and Poloniex and find the correlations among flows and Ether price. ![]() We think exchange flows are important because centralized exchanges are where price discovery happens, and crypto has to flow into an exchange before it can be traded! New metrics such as flows into/out of centralized exchanges can be used for short/medium term trading strwategies and to gain an edge while market making. We often get asked - Are these metrics valuable for trading? Can on-chain data be used to predict short/medium term price movements? We believe the answer is YES, but not with the existing set of metrics. Metrics such as active addresses, block rewards/hashrate, circulating supply, coin volumes and transaction counts are strong indicators of the health of a network. Masses Move Markets: Crypto flow to exchanges correlates with priceĪt TokenAnalyst we’ve always believed that there is fundamental value in blockchain data.
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