- Buy Crypto
- Markets
Futures- Spot
- Copy Trade
- Earn
- More
On-chain Data Academy (Part 5): How Many People Are Actually Making Money? A Five-Minute Overview of the Objective Sentiment Indicator PSIP
Original Article Title: "On-Chain Data Classroom (Part 5): How Many People Are Actually Making Money? A Five-Minute Guide to the Objective Sentiment Indicator PSIP!"
Original Article Author: Mr. Berg, On-Chain Data Analyst
This article is the 5th part of the On-Chain Data Classroom series, with a total of 10 parts. It will take you step by step through understanding on-chain data analysis. Interested readers are welcome to follow this series.
Related Reading: "On-Chain Data Classroom (Part 4): Visualized BTC Chip Price Distribution Chart"
TL;DR
- This article will introduce the on-chain indicator PSIP
- PSIP = Percentage of Supply in Profit, among circulating $BTC
- It can serve as a guide to market sentiment, with applications in recognizing market tops and bottoms
What is PSIP?
PSIP, short for Percent Supply in Profit, is defined as "the percentage of circulating $BTC that is in a state of profit."
Calculation method:
It distinguishes profit and loss chips by "comparing each $BTC's last transfer price with the current price."
When the current price is higher than a certain $BTC's last transfer price, this $BTC is considered a profit chip.
What if Most Chips Are in a Loss...?
An important application scenario of PSIP is market bottoms. When most chips are in a loss, it is usually a good time to buy the dip.
The logic is straightforward:
Under similar conditions, the more profitable holders, the greater the selling pressure from profit-taking in the market, and vice versa.
As shown in the chart below, historical points where $BTC had PSIP <50% are marked, indicating very precise opportunities to buy the dip
What if the Majority of Chips are in Profit?
As shown in the chart below, the percentage of chips in profit reaches a maximum value of 100%. Therefore, it is difficult to determine a top based solely on high PSIP.
Here is an interesting logic to share: “Observe the Correlation Change between PSIP and Price”
This idea is derived from the following analysis: The Market Pulse – Week 36, 2022
Conclusion
The above is all the content of On-Chain Data School (Part Five). For readers interested in further studying on-chain data analysis, remember to keep track of this series of articles!
If you want to see more analysis and teaching content on on-chain data, feel free to follow my Twitter account (X)!
I hope this article has been helpful to you. Thank you for reading.
You may also like
WLFI at it Again? Banking License Controversy Amid $500M Investment
The Aave civil war escalates, Morpho quietly doubles: Is the lending throne about to change hands?
Dune Stablecoin Research: The Flow and Demand of a $300 Billion Market
Stripe Annual Letter: New cognitive density is extremely high, especially the 5-level model of "AI + Payments"
Sam Altman's Twenty-Four Hours: The Pentagon said "no" twice, but only one was serious
The US-Iran Conflict Spreads to the Crypto Space: What to Expect in the Market on Monday
Lily Liu, the chair of the Solana Foundation, shouted "Don't waste time on crypto," is the crypto industry really dead?
The little deer live by the water and grass
The world belongs to Chinese people who speak English
Why Stop at 126K? Michael Saylor Breaks Down BTC Stagnation and Retail Absence Truth
Virtuals Protocol's inaugural Titan project: ROBO aims to give a wallet to a robot
Stablecoin Latest Report: Actual Distribution and Circulation Much More Notable Than Supply
Paradigm's New Arithmetic: When Crypto Can't Hold 12.7 Billion, AI Becomes the Answer
Wintermute Founder: In the Lost Cryptocurrency Market, What Can We Still Do?
$1.3 Billion Debt: BitDeer Faces Tough Battle
Anthropic's IPO Gamble: At the Most Unlikely Moment, It Chose to Say No
Paradigm's Math Problem: $12.7 Billion, Too Big for a Single Crypto Fund
App