The Pomp Podcast
#610 The On-Chain Metrics OG w/ David Puell & Will Clemente
- David Puell outlined the three waves of on-chain analytics evolution: early pioneers (Willy Wu, Nick Carter, 2016–17), second-wave researchers like himself who created metrics such as MVRV and SOPR, and the current data service provider wave (Glassnode, CryptoQuant, Coinmetrics) racing to extract signal from noise.
- MVRV ratio (Market Value to Realized Value) compares current market cap to the cost basis of all holders, signaling overextension when above realized cap and accumulation opportunity when below it.
- Funding rates on perpetual contracts provide more reliable signals than on-chain metrics alone, with negative funding and sustained negative premiums indicating demand for spot over derivatives and bullish conditions.
- Institutional participation has reshaped market structure: Grayscale arbitrage unwind and profit-taking after 3x–6x returns collapsed new capital inflows; macro events (COVID, black swans) can override technical signals but do not invalidate long-term on-chain accumulation trends.
- Current market shows a major divergence between deteriorating price action and bullish on-chain signals (net illiquid supply, negative funding, SOPR neutral)—the largest disconnect since COVID, suggesting potential for a large volatility squeeze once price reprices the underlying accumulation.
- On-chain analytics are most useful for active managers confirming macro theses and swing traders planning positions over weeks to months; permanent holders benefit less from short-term metrics, while day traders should focus on order books and funding rates.