On-Chain Signals [LuxAlgo]

The On-Chain Signals indicator uses fundamental blockchain metrics to provide traders with an objective technical view of their favorite cryptocurrencies.

It uses IntoTheBlock datasets integrated within TradingView to generate four key signals: Net Network Growth, In the Money, Concentration, and Large Transactions.

Together, these four signals provide traders with an overall directional bias of the market. All of the data can be visualized as a gauge, table, historical plot, or average.

🔶 USAGE



The main goal of this tool is to provide an overall directional bias based on four blockchain signals, each with three possible biases: bearish, neutral, or bullish. The thresholds for each signal bias can be adjusted on the settings panel.

These signals are based on IntoTheBlock's On-Chain Signals.

• Net network growth: Change in the total number of addresses over the last seven periods; i.e., how many new addresses are being created.
  
• In the Money: Change in the seven-period moving average of the total supply in the money. This shows how many addresses are profitable.
  
• Concentration: Change in the aggregate addresses of whales and investors from the previous period. These are addresses holding at least 0.1% of the supply. This shows how many addresses are in the hands of a few.
  
• Large Transactions: Changes in the number of transactions over $100,000. This metric tracks convergence or divergence from the 21- and 30-day EMAs and indicates the momentum of large transactions.
  

All of these signals together form the blockchain's overall directional bias.

• Bearish: The number of bearish individual signals is greater than the number of bullish individual signals.
  
• Neutral: The number of bearish individual signals is equal to the number of bullish individual signals.
  
• Bullish: The number of bullish individual signals is greater than the number of bearish individual signals.
  

If the overall directional bias is bullish, we can expect the price of the observed cryptocurrency to increase. If the bias is bearish, we can expect the price to decrease. If the signal is neutral, the price may be more likely to stay the same.

Traders should be aware of two things. First, the signals provide optimal results when the chart is set to the daily timeframe. Second, the tool uses IntoTheBlock data, which is available on TradingView. Therefore, some cryptocurrencies may not be available.

🔹 Display Mode



Traders have three different display modes at their disposal. These modes can be easily selected from the settings panel. The gauge is set by default.

🔹 Gauge



The gauge will appear in the center of the visible space. Traders can adjust its size using the Scale parameter in the Settings panel. They can also give it a curved effect.

The number of bars displayed directly affects the gauge's resolution: More bars result in better resolution.

The chart above shows the effect that different scale configurations have on the gauge.

🔹 Historical Data



The chart above shows the historical data for each of the four signals.

Traders can use this mode to adjust the thresholds for each signal on the settings panel to fit the behavior of each cryptocurrency. They can also analyze how each metric impacts price behavior over time.

🔹 Average



This display mode provides an easy way to see the overall bias of past prices in order to analyze price behavior in relation to the underlying blockchain's directional bias.

The average is calculated by taking the values of the overall bias as -1 for bearish, 0 for neutral, and +1 for bullish, and then applying a triangular moving average over 20 periods by default. Simple and exponential moving averages are available, and traders can select the period length from the settings panel.

🔶 DETAILS

The four signals are based on IntoTheBlock's On-Chain Signals. We gather the data, manipulate it, and build the signals depending on each threshold.

• Net network growth
  

  float netNetworkGrowthData      = customData('_TOTALADDRESSES')
  float netNetworkGrowth          = 100*(netNetworkGrowthData[1]/netNetworkGrowthData[8] - 1)

• In the Money
  

  float inTheMoneyData            = customData('_INOUTMONEYIN')
  float averageBalance            = customData('_AVGBALANCE')
  float inTheMoneyBalance         = inTheMoneyData*averageBalance
  float sma                       = ta.sma(inTheMoneyBalance,7)
  float inTheMoney                = ta.roc(sma,1)

• Concentration
  

  float whalesData                = customData('_WHALESPERCENTAGE')
  float inverstorsData            = customData('_INVESTORSPERCENTAGE')
  float bigHands                  = whalesData+inverstorsData
  float concentration             = ta.change(bigHands[1])*100

• Large Transactions
  

  float largeTransacionsData      = customData('_LARGETXCOUNT')
  float largeTX21                 = ta.ema(largeTransacionsData,21)[1]
  float largeTX30                 = ta.ema(largeTransacionsData,30)[1]
  float largeTransacions          = ((largeTX21 - largeTX30)/largeTX30)*100

🔶 SETTINGS

• Display mode: Select between gauge, historical data and average.
  
• Average: Select a smoothing method and length period.
  

🔹 Thresholds

• Net Network Growth : Bullish and bearish thresholds for this signal.
  
• In The Money : Bullish and bearish thresholds for this signal.
  
• Concentration : Bullish and bearish thresholds for this signal.
  
• Transactions : Bullish and bearish thresholds for this signal.
  

🔹 Dashboard

• Dashboard : Enable/disable dashboard display
  
• Position : Select dashboard location
  
• Size : Select dashboard size
  

🔹 Gauge

• Scale : Select the size of the gauge
  
• Curved : Enable/disable curved mode
  
• Select Gauge colors for bearish, neutral and bullish bias
  

🔹 Style

• Net Network Growth : Enable/disable historical plot and choose color
  
• In The Money : Enable/disable historical plot and choose color
  
• Concentration : Enable/disable historical plot and choose color
  
• Large Transacions : Enable/disable historical plot and choose color