Price is one signal. On-chain data is another. Every transaction on a public blockchain is recorded permanently, which means a lot of network behavior can be measured directly instead of guessed.
For crypto markets, this creates a separate view of sentiment: what holders are actually doing with their assets, how much is moving to exchanges, and how long coins stay in one place.
When tokens move from a wallet into an exchange wallet, they are typically being prepared for trading. Net inflow to exchanges tends to rise during periods of high activity. Net outflow, when tokens leave exchange wallets, is often read as a signal that holders are moving assets into custody rather than leaving them ready to trade.
The metric is directional, not binary. A single inflow or outflow day means little on its own; what matters is the trend over weeks.
Net Unrealized Profit/Loss (NUPL) uses the last price each token moved and compares it with the current price. It separates the market into positions held at a profit and positions held at a loss. The ratio reads as an indicator of how much total pressure exists across the network. High values get weaker as more holders sit in profit territory; low values reflect widespread losses.
The Market Value to Realized Value (MVRV) ratio compares the current market value against the value at which each token last moved, known as the realized value. Readings far above 1 mean tokens moving value well above cost basis; readings near or below 1 mean the market is pricing close to or below what holders paid.
MVRV is used as a valuation frame for the network as a whole, not as point-in-time trading advice.
Addresses that belong to the same owner are grouped into entities. Adjusting for these clusters removes artificial double counting from self-transfers. Entity-adjusted supply treats the number of distinct meaningful owners, which gives a cleaner view of distribution than raw address counts.
No single metric is decisive. Sentiment is a sum of many signals: exchange flows pointing one way, NUPL and MVRV describing profit distribution, and entity-adjusted supply measuring how ownership is spread. The strongest on-chain layer comes from measuring all of them across time and watching when they change direction together.