On-Chain Data Monitoring System Analysis of ABIT Exchange
With the technological concepts such as big data, cloud computing, artificial intelligence etc. gradually connecting with our social life, data information has already penetrated into every industry and business functional area. For cryptocurrencies, clearly data information is the core element for investors’ decision making process. A complete trading can roughly be divided into “receiving data information (general market data), data analyzing (processing data), and decisions making (trading instructions)”. To a large extent, data information reflects real situation of the market. Therefore, the method, order, accuracy and fineness of data presentation will affect the final investment decision. However, most exchanges can provide investors with very limited information.
In order to assist investors to reduce the learning cost and improve the quality of decision-making, ABIT Exchange recently added the “on-chain data monitoring function” in the spot trading section. By monitoring the transaction data and capital trends of various cryptocurrencies on the blockchain in real time, ABIT provides professional visual data reference for the majority of individual investors and institutions around the world, and assists users to make more accurate, timely and effective trading decisions.
The data of the on-chain data monitoring function comes from ABIT’s strategic partner IntoTheBlock (ITB). ITB is a leading crypto intelligence company in the world that uses machine learning and statistical modeling to deliver actionable intelligence for crypto assets, providing data for well-known ranking sites such as Coinmarketcap and Coingecko.
The statistics of ITB data embedded in ABIT are mainly divided into two aspects: “token summary”, which is an overview of the current status of specific currencies, and “actionable signals”, which is an observation of the investment sentiment on the chain.
On the trading page of the ABIT platform, in addition to the common market trends, there are six pieces of extra information which are “Holders Making Money at Current Price, Concentration by Large Holders, Price Correlation with Bitcoin, Holders’ Composition by Time Held, Transactions Greater than $100K and Transaction Demographics”
Holders Making Money at Current Price: For any address with a balance of tokens, ITB identifies the average cost at which those tokens were purchased and compares it to current price. If Current Price > Average Cost, address is “In the Money.” This information can reflect the profitability of the currency. It is a reference value for novices who are new to the market or investors who want to try new currencies.
Concentration by Large Holders: The total holdings of whales (addresses that own more than 1% of the circulating supply) and Investors (addresses that own between 0.1% and 1% of the circulating supply). This information represents the concentration level of funds and is an important indicator for examining currency liquidation and transaction depth. It can intuitively show whether the currency is easily affected by large accounts.
Price Correlation with Bitcoin: 30-day price correlation with BTC. As the leader of industry, Bitcoin has a profound impact on the overall market trend. There are many analyses of the BTC market, but some small currencies are rarely concerned by analysts. Knowing the correlation between certain currencies and BITC prices, investors can make decisions based on the BTC market.
Holders’ Composition by Time: Held Classification of addresses according to their weighted average holding period. It is classified by holding positions for more than one year, 1 to 12 months and less than 1 month. Generally speaking, people are more willing to hold assets for long term if they have the potential to grow. Assets with a large number of long-term holders are usually high-quality assets recognized by the market. (Assets involving lock-ups and pledges need to be distinguished by investors themselves).
Transactions Greater than $100K: Number of transactions, each with a value of $100,000 or greater in the past 7 days. The flow of large funds is an important indicator for predicting market conditions. In the past, investors needed to go to specific websites to check. This information built into the ABIT platform provides investors with great convenience.
Transaction Demographics: Number of transactions that occur during Western trading times (10am to 10pm UTC) vs those that occur during Eastern trading times (10pm to 10am UTC) for the last 14 days. Digital assets are global assets. Even for the same asset, due to differences in geography, culture, and market attitude, traders’ performance is different. The demographic characteristics of transactions reflect the attitudes of traders worldwide. When trading digital assets from other countries/regions, the attitude of local investors may be worth referring to.
In addition to the token summary, ABIT platform also provides observation data on investment sentiment, mainly including Fluctuation Pulse, Net Network, In The Money, Concentration and Large Transactions.
Fluctuation Pulse: Through an objective evaluation and analysis of a series of quantitative data, the signal shows the current market’s overall sentiment on the specific currency. It represents the market’s forecast.
Net Network Growth: Momentum signal that gives a pulse of the true growth of the token’s underlying network (new addresses — addresses that go to zero). It also reflects the increase and decrease of the total holders.
In the Money: Change in “In the Money” addresses momentum signal. Compared with “Holders Making Money at Current Price” in Token summary, “in the money” in action signal section is a trend, shows the proportion of the number of profitable addresses increases or decreases.
Concentration: Accumulation (bullish) or reduction (bearish) of large holders’ positions.
Large Transactions: Momentum indicator of number of transactions greater than $100,000. It’s the dynamic version of “Transactions Greater than $100K” in Token Summary.
There are multiple types of data on ABIT exchange platform and covering a wide range of information. However, instead of using them as direct weather vane for investment, users should analyse the information behind the data, and formulate their own investment strategies. This is the ability every trader must own. When using correctly, the data on the ABIT chain is undoubtedly valuable as a data support for auxiliary judgment.
In addition to spot trading, ABIT Exchange also plans to develop data monitoring functions for contract transactions with ITB. Contracts are the most popular digital derivatives in the current market. Compared with spot trading, contract transactions involve more information, and the data collection and monitoring difficulty also rises. However, according to the ABIT team, users will soon see this function in their perpetual swap section. What surprises that will bring to the users? How will the future of big data benefit the encryption investment develop? let us wait and see.