On-chain Data Academy (4): Visualized BTC Chip Price Distribution Chart

This article is the fourth article in the On-Chain Data Academy series, with a total of 10 articles. Take you step by step to understand on-chain data analysis, welcome interested readers to follow this series of articles. (Synopsis: On-Chain Data Academy (1): Do you know what the average cost of BTC in the whole market is? (Background supplement: On-chain data academy (2): Hodlers who always make money, how much does it cost them to buy BTC? TLDR This article will introduce the on-chain indicator URPD shows the distribution of BTC chips with different holding costs URPD can be used to observe the turnover and distribution of chips between them, and give guidance to the trend URPD introduces URPD, full name UTXO Realized Price Distribution. Because BTC has a unique UTXO blockchain structure, we can trace data on-chain that is not available in traditional financial markets. The URPD chart is an indicator derived from this principle: the horizontal axis of the chart is the price, and the vertical axis is the number of BTC. For example, let’s say there are 500,000 BTC chips at 80,000, which means that “the purchase cost of 500,000 BTC chips is at 80,000”. (URPD chart example) Chips change, accumulation and distribution After understanding the concept of URPD, we can then observe the change of hands of chips at different price points according to the daily URPD change. For example: the following figure is the URPD chart for 2024 / 05 / 01 (URPD chart for 2024 / 05 / 01) Next, let’s take a look at the URPD chart in 2024 / 10 / 01 five months later: (URPD chart for 2024 / 10 / 01) After five months of wide volatility, we can clearly see the situation of “low-cost chips distributed upward”. Historically, when the top appeared, it was usually accompanied by “the distribution of low-cost, high-value profit chips nearing the end”; At the bottom, you will see a large number of chips accumulating in a relatively narrow range. Therefore, URPD can often be used with other on-chain data (e.g., Realized Profit, MVRV…) when performing analysis. etc.) to cut into and understand the market from a more comprehensive perspective. (URPD chart on 2023/01/01, where it was almost at the bottom of the bear market) Support, resistance, consensus When a single price range begins to accumulate a large number of chips, it means that this range has gradually formed a consensus on supply and demand. Once the subsequent price rises rapidly and leaves this range, it is likely to provide support in the future due to the large number of chips changing hands in this range; Conversely, if it falls below this range, a large number of chips in the range will become a trap and may become resistance in the future. Conclusion The above is all the content of the on-chain data academy (4), readers who are interested in learning more in-depth on-chain data analysis, remember to follow this series of articles! If you want to see more on-chain data analysis and teaching content, please follow my Twitter (X) account! Hope this article helps you, thanks for reading. Related Stories On-Chain Data Academy (3): Have the makers at the bottom made profits? On-chain analysis beginner course" fully grasps the basic key indicators of the crypto market, concepts and tools are all in this After Bitcoin fell for three consecutive months, on-chain data shows that it is about to return? “On-chain data academy (4): visual BTC chip price distribution map” This article was first published in BlockTempo’s “Dynamic Trend - The Most Influential Blockchain News Media”.