The Bitcoin Blockchain Is a Public Ledger Anyone Can Read
From the mempool and realized price to Long-Term Holder supply and HODL Waves. A practical introduction to the five on-chain metrics every beginner should learn first, with free tools and real-world examples for each.
Bitcoin is an asset where every transaction is recorded in a public ledger. Position data that only insiders know in the stock market is visible to everyone in Bitcoin. The field that makes use of this fact is called on-chain analysis.
This article is for readers who want to answer the following question: "I am not a trader or analyst, but when I see a sentence like 'long-term holders have started selling' in the news, I want to understand what it means." Five core metrics are introduced one by one, each with a free resource where you can check it yourself.
1. Mempool: Network Congestion at This Moment
The mempool is the pool of pending transactions that miners have not yet included in a block. When the mempool is empty, fees are low; when it is full, fees spike.
Where to check: mempool.space
How to read it:
- The "Recommended Fees" in the top right tells you how many sat/vB you need to get confirmed in the next block, within 30 minutes, or within 1 hour.
- "Mempool Blocks" shows how many blocks worth of transactions are currently waiting. When this exceeds 10 blocks, you are in a fee-spike period.
- Various filters (Ordinals, Runes, RBF) let you see which types of transactions are filling the mempool.
Practical use: When you need to send an on-chain transaction, aim for a moment when the mempool is empty. Weekend early mornings in Korean time (after Western business hours end) tend to be relatively quiet.
2. Realized Price: The Average Price the Market Actually Paid
Market capitalization is "current price x circulating supply." But not every coin was traded at that price. A coin bought for $100 ten years ago and never moved cannot be lumped together with a coin bought for $100,000 yesterday.
Realized price is calculated by summing the price at which each UTXO last moved, then dividing. In other words, it is close to the average acquisition cost for the entire market. When the current price is above the realized price, the market as a whole is in an average profit state; when below, it is in a loss state.
Where to check: bitbo.io, Woobull Charts (free), Glassnode, CryptoQuant (partially free)
Interpretation:
- Current price / realized price ratio (MVRV) near 1.0: The market is near average acquisition cost. Bottom range.
- MVRV above 3.0: The entire market holds large unrealized gains. Overheated range.
- MVRV below 1.0: The entire market is at a loss. In all four previous cycles, this was a bottom signal.
Practical use: Do not use this metric as a trading signal. Use it only to get a rough sense of where you are in the long-term cycle.
3. Long-Term Holder Supply (LTH Supply): From Weak Hands to Strong Hands
The length of time a UTXO has sat unmoved is called coin age. Coins that have not moved for 155 days or more are classified as belonging to Long-Term Holders (LTH). The 155-day threshold was chosen because, statistically, the probability of selling drops sharply after that point.
Where to check: bitcoincounterflow.com, Glassnode Studio free dashboard
Interpretation patterns:
- Mid-to-late price uptrend: LTH supply decreases. Long-term holders are beginning to take profits.
- Late price downtrend: LTH supply increases. Long-term holders are absorbing coins panic-sold by short-term holders.
- LTH supply growth slowing after sideways movement: An early sign of a new cycle.
This flow is called "from weak hands to strong hands." The end of a bull market typically coincides with large-scale selling by long-term holders, while the end of a bear market is inversely close to the point when the long-term holder share reaches a historical peak.
4. HODL Waves: Coin Age Distribution at a Glance
HODL Waves is a stacked-area chart that visualizes all bitcoin by age group. The thinnest band at the bottom represents coins that moved within a day; the top represents coins that have been dormant for 10 or more years. Darker colors indicate older coins.
Where to check: LookIntoBitcoin (free)
How to read it:
- Dark bands (5+ years) thickening: Long-term accumulation period. Market participants are not selling.
- Dark bands thinning: Old coins have moved. Past profit-taking or generational turnover.
- Light bands (within 1 month) expanding explosively: Active short-term trading. A typical pattern of the late bull market.
Practical use: You can intuitively judge whether the current market is a "quiet accumulation phase" or an "overheated distribution phase."
5. Exchange Netflow: A Leading Indicator of Supply Shocks
Exchange wallet addresses are labeled and published publicly by on-chain analysts. The difference between the amount flowing in (inflow) and the amount flowing out (outflow) is called netflow.
- Positive netflow (inflow > outflow): Coins are accumulating on exchanges. Interpreted as a signal of growing selling pressure.
- Negative netflow (outflow > inflow): Coins are moving from exchanges to personal wallets. Interpreted as declining selling intent and increasing self-custody.
Where to check: CryptoQuant (free plan), Coinglass
Caveats: Exchange address labels are not perfect. If a whale uses OTC, the flow will not be captured here. Also, when an exchange redistributes coins internally between cold and hot wallets, this can easily be mistaken for a large flow. Do not use this as a standalone metric - read it together with the LTH supply and MVRV metrics above.
Practical Tips for Viewing All Metrics in One Place
If combining tools on your own feels overwhelming, bookmarking just these three sites is enough.
- mempool.space: Network state at this exact moment.
- LookIntoBitcoin: Long-term metrics such as MVRV, HODL Waves, and Puell Multiple.
- CryptoQuant: Exchange flows, miner flows (partially free).
Checking the data on these three sites once or twice a month is enough to build the basic skills to interpret "the numbers in the news."
Limits of On-Chain Analysis
One final point worth emphasizing. On-chain analysis is not magic. Several structural limits must be clearly stated.
- Incomplete anonymity: Even though addresses are public, identifying the "owner" of an address is a probabilistic inference.
- Labeling errors: Exchange, fund, and whale address labels are researchers' interpretations and contain errors.
- Not a future prediction: The fact that a specific pattern repeated across four past cycles does not guarantee the next cycle will follow.
- Off-chain factors: Regulation, macroeconomics, and geopolitics are not reflected on-chain.
Even so, on-chain analysis is a unique tool that exists only for Bitcoin. This is the first asset in history with this level of transparency. Using this tool as a window for understanding the behavior of your own assets is, ultimately, an extension of the practice of self-custody.