In a May 30 tweet, Ethereum (ETH) core developer Tim Beiko confirmed that the much-anticipated switch from proof-of-work to proof-of-stake can be expected “around June 8 or so.”
Interestingly, the Ether price action is relatively unchanged despite the unexpected bullish announcement. There was a +10% spike on May 30, but those gains were given back between May 31 and June 2. It is very likely that this event has yet to be priced in, giving traders and investors a possible early entrant advantage.
It’s essential to monitor on-chain data
From an investing and trading viewpoint, cryptocurrency markets have a distinct disadvantage over-regulated markets and transparency. The stock market is chock-full of legally required disclosures. In the stock market, the retail trader can identify how many shares of a stock are short, what institution bought a large disclosed amount (or sold), what insiders bought or sold and a myriad of other forms of information.
The cryptocurrency markets do not have that kind of legal requirement. In fact, the public doesn’t know if the Bitcoin (BTC) or Ethereum being bought and sold on an exchange is the real cryptocurrency or a type of internal derivative used to facilitate liquidity. But crypto markets have something better than the stock market and that is on-chain data.
On-chain data allows investors and traders to monitor a blockchain’s network activity. It can answer questions: How many Ether are being sent to an exchange? Are there any large transactions? Are any ‘whale’ wallets bigger or smaller? On-chain data can help determine whether a trader or investor should be bullish or bearish.
On-chain data that measure inflows and outflows is often used to determine a bias of whether a cryptocurrency is bullish or bearish. Inflow measurements are cryptocurrencies entering an exchange from outside wallets and are often perceived as a sign of incoming selling pressure. Outflow measurements are cryptocurrencies exiting an…
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