How do I pick 1-2 on-chain signals that actually show market sentiment?

[Dennis_P]

I've been trying to use on chain analytics to get a better sense of market sentiment beyond just price charts. The data is fascinating, but I'm getting lost in all the different metrics like exchange flows, active addresses, and whale holdings. For someone new to this, which one or two signals actually have a decent track record of providing useful insight?

[JasonS]

Two signals that tend to carry signal value for newcomers are MVRV and exchange net flow. MVRV is market cap divided by realized cap; high values suggest large unrealized profits and a higher chance of distribution, while low values hint at capitulation or undervaluation. People look for extremes as rough markers, not precise calls. citeturn0search0turn0search6

[JerryLC]

Also keep in mind these are not magic bullets; the usefulness depends on regime and timeframe. Signals can lag price moves and sometimes contradict each other. Treat them as context, not confirmation. citeturn0search6

[Hannah20]

Practical starter plan: track BTC or your main asset, keep it simple with 2 signals, log weekly readings, and compare with price charts. Start with MVRV and exchange net flow; add a third only if you need more nuance. citeturn0search0turn0search3

[Frank68]

How to read exchange net flow: net outflows from exchanges can indicate accumulation and potential upside; inflows can signal distribution and selling pressure. citeturn0search3

[Brandon_P]

Data quality matters; metrics are computed by data providers and can change; they are not static. Be mindful of data sources and definitions. citeturn0search1

[Oliver13]

Want a quick starter checklist? I can tailor a two-week plan for your asset and time horizon.