Read time: ≈ 14-16 min • Last updated: September 16, 2025
Executive summary: I remember staring at the red candle on my screen, my stomach sinking. It was early 2023, and Bitcoin had just dropped 15% in a day. I had no idea why. I was trading based on fear and hype, just like everyone else. That loss was my wake-up call. I decided to learn the language the market actually speaks: on-chain data. This guide will teach you what I wish I knew back then—how to use tools like Glassnode, Dune Analytics, and Nansen to see beyond the price charts and understand what's really happening in crypto.
Quick note: this article includes affiliate links to tools I genuinely use every day. They help keep the blog running.
1. My $5,000 mistake: Trading blind
Let me take you back to January 2023. Bitcoin was pumping, and I was feeling like a genius. I'd bought at $16k, and we were approaching $24k. Then, out of nowhere, a 15% crash. My profits vanished in hours.
I spent the next week trying to understand why. Was it Elon Musk? China FUD? Fed regulations? The truth was, I was looking in all the wrong places.
That's when I discovered that large wallets had been distributing their coins to exchanges for weeks before the crash. The signs were there in the blockchain data—I just didn't know how to read them. That $5,000 lesson taught me more about crypto than any YouTube influencer ever did.
2. What is on-chain analysis? (Simple analogy)
Think of Bitcoin like a public company. The blockchain is its accounting book—every transaction is recorded for anyone to see.
Price vs. Fundamentals
Price charts tell you WHAT is happening. On-chain data tells you WHY it's happening. It's the difference between watching a thermometer and understanding the weather patterns.
The Three Pillars of On-Chain Data
1. Liquidity: Who's moving coins, and where?
2. Investor Behavior: Are holders accumulating or selling?
3. Network Health: Is the ecosystem growing or shrinking?
Pro Tip: You don't need to be a data scientist. The tools today do the heavy lifting—you just need to know what to look for.
3. 5 essential on-chain metrics I check every morning
These are my non-negotiables. They give me a pulse on the market in under 5 minutes.
1. Exchange Net Flow
Are coins moving TO or FROM exchanges? Inflows often signal selling pressure. Outflows suggest accumulation. This was the metric I missed before my 2023 crash.
2. MVRV Ratio
Is the market price above or below "fair value"? High MVRV suggests overvaluation. Low MVRV often indicates undervaluation.
3. Stablecoin Supply
Are investors holding cash (stablecoins) or taking risk? Growing stablecoin supply on exchanges often precedes buying pressure.
4. Network Value
Is the network growing? I look at active addresses and transaction count. Price follows adoption.
5. Long-Term Holder Behavior
What are the OGs doing? When whales who held through cycles start moving coins, I pay attention.
My Morning Checklist
- ✅ Exchange Net Flow (Glassnode)
- ✅ MVRV Ratio (Glassnode)
- ✅ Stablecoin Supply (Dune dashboard)
- ✅ Smart Money Movements (Nansen)
- ✅ Bitcoin Dominance (TradingView)
4. How to use Glassnode: Studio tutorial
Glassnode is my foundation. It's like the Bloomberg Terminal of crypto.
Best For: Comprehensive Bitcoin and Ethereum metrics
Free Tier: Limited but useful for beginners
My Plan: Advanced ($149/mo) - worth every penny
2025 Feature: New AI-assisted signal detection
Getting Started
1. Create a free account
2. Explore the "Market" tab for popular metrics
3. Set up alerts for exchange flows
4. Use their preset "Workbenches" for different strategies
My Favorite Glassnode Chart
The "Realized Price" chart. It shows the average price all coins were last moved. When market price dips below realized price, it's often a good accumulation zone.
5. How to use Dune Analytics: Finding alpha
If Glassnode is the terminal, Dune is the research lab. It's where the community builds custom dashboards.
Best For: Altcoin research and DeFi protocols
Free Tier: Excellent for beginners
My Plan: Free - I mostly use community dashboards
2025 Feature: Multi-chain support now includes Solana and Cosmos
Finding Gold in Dune
1. Search for your favorite project + "dashboard"
2. Look for dashboards with frequent updates and clear explanations
3. Follow great analysts like @hildobby and @rchen8
4. Check the "Wizard" feature to build simple queries without coding
My Go-To Dune Dashboards
• Ethereum Ecosystem by hildobby
• Stablecoin Supply by rchen8
• Bitcoin On-Chain by paulapivat
6. How to use Nansen AI: Smart Money tracking
Nansen answers one question: What are the smartest investors doing right now?
Best For: Wallet labeling and smart money tracking
Free Tier: None, but worth the investment if serious
My Plan: Premium ($149/mo) - my secret weapon
2025 Feature: Nansen 2.0 with predictive AI signals
Nansen in Action
1. Smart Money: See what VCs and funds are buying
2. Wallet Profiler Label any wallet to understand who's behind it
3. Token God Mode: Deep dive into any token's holders
4. Alert System: Get notified when smart money moves
Real Example
In March 2025, I noticed several "Smart Money" wallets accumulating an obscure DeFi token. I did my research, took a small position, and caught a 3x move over the next month. That one trade paid for my Nansen subscription for years.
7. Free alternatives for beginners
You don't need to pay hundreds upfront. Start with these free options:
| Tool | Best For | Limitations |
|---|---|---|
| Glassnode Free | Basic Bitcoin metrics | 24h delay, limited metrics |
| Dune Free | Community dashboards | Query limits, no private dashboards |
| Token Terminal | Fundamental analysis | Limited chains, basic metrics |
| DeFi Llama | TVL and yield tracking | No wallet-level data |
Start Free: I began with free tools too. Only upgrade when you consistently find yourself needing more data.
8. My daily on-chain analysis workflow
Here's exactly how I spend 15 minutes each morning:
Step 1: Macro View (5 mins)
• Check Bitcoin and Ethereum exchange flows on Glassnode
• Review stablecoin supply on Dune
• Scan for large transfers on Whale Alert
Step 2: Smart Money Watch (5 mins)
• Open Nansen to "Smart Money" dashboard
• Check what top holders are doing with major tokens
• Look for unusual activity in mid-cap tokens I follow
Step 3: Alert Review (5 mins)
• Review price alerts set on TradingView
• Check Nansen for smart money movements
• Scan Glassnode for metric threshold breaches
This routine keeps me informed without overwhelming me with data.
9. Limitations and what on-chain data CAN'T tell you
On-chain analysis isn't magic. Here's what it doesn't do:
1. Predict Black Swan Events
No data predicted the FTX collapse. Some things only show up after they happen.
2. Measure Off-Chain Activity
OTC trades, derivatives, and private transactions don't appear on-chain.
3. Replace Fundamental Analysis
Tokenomics, team, and product matter too. Data is one piece of the puzzle.
4. Time Tops and Bottoms Perfectly
Data shows probabilities, not certainties. It helps you make educated guesses, not perfect calls.
Warning: Don't become a data zombie. I've seen traders paralyzed by analysis. Use on-chain data as a compass, not a crystal ball.
10. Conclusion: Stop guessing, start analyzing
Learning on-chain analysis transformed me from a reactive trader to a proactive investor. I still take losses, but now they're calculated risks, not blind guesses.
Start with one metric. Master it. Then add another. Within a few months, you'll see the market in a way most traders never will.
What's your favorite on-chain metric? Share your thoughts in the comments!
Disclaimer: This article is for educational purposes only and not financial advice. Cryptocurrency investments are volatile and risky. Past performance doesn't guarantee future results.
Sources & further reading
- Glassnode Academy Educational Content
- Nansen Research Reports (2025)
- Dune Analytics Community Tutorials
- CoinMetrics Network Data Reports
- Chainalysis Market Intelligence
FAQ — quick answers
A: Absolutely. Start with one simple metric like exchange flows. The tools have become much more user-friendly in 2025. Glassnode's new guided experience is perfect for beginners. You don't need to understand the technical details—just what the data means for market sentiment.
A: You can start completely free with Glassnode's free tier and Dune Analytics. If you get serious, I recommend starting with Glassnode Advanced at $29/month. Only upgrade to premium tools like Nansen when you're actively trading with significant capital.
A: Not exactly. It measures market conditions and probabilities, not certainties. Think of it like weather forecasting—it can tell you a storm is likely, but not exactly when it will hit your house. It's incredibly valuable for understanding market structure and sentiment.
A: Start with Exchange Net Flow. It's simple to understand: coins moving to exchanges often means selling pressure, coins moving off exchanges suggests accumulation. This one metric alone would have saved me from several bad trades in my early days.
This article is educational only and not investment advice. Cryptocurrency investments are volatile and risky. Always do your own research and consider speaking with a financial advisor before investing.