On-Chain Metrics and Price Action Correlation - A Newbie's Question
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Hey everyone,
I've been spending a good amount of time in the $BTC room, trying to wrap my head around how to effectively use on-chain metrics. I get the general idea – things like UTXO age bands, MVRV, SOPR, etc., can give us a read on market sentiment and potential turning points. What I'm really struggling with, though, is how you veterans actually integrate these into your day-to-day analysis alongside traditional price action and macro. Is it more about confirmation? Or do some of you ever initiate positions solely based on a strong on-chain signal, even if price action hasn't fully confirmed yet? I find myself often seeing a strong on-chain signal, but then price just chops around for days, making me question its immediate relevance. How do you balance the predictive power of on-chain data with the immediate reality of candlesticks and order flow?