Global In/Out of the Money
The Global In/Out of the Money (GIOM) classifies addresses based on if they are profiting (in the money), breaking even (at the money) or losing money (out of the money) on their positions at current price. IntoTheBlock calculates an address’ average cost based on the weighted average price at which it bought or received the tokens currently held by the address. IntoTheBlock categorizes addresses and tokens accordingly to obtain an aggregate view of profitability for a particular crypto asset.
The GIOM aggregates all addresses’ positions into clusters based on the number of addresses (or volume) that had previously bought at a certain price range. The larger these clusters, the more support/resistance is expected around these price levels.
Global In/Out of the Money for Bitcoin
By showing the number of addresses making/losing money on their positions, users can obtain a better idea of buying/selling pressure at a certain price range. For instance, where most addresses are out of the money, the price will have high selling pressure since many of these addresses will look to sell once the market price reaches their average cost and break-even on their positions. This will act as a resistance level to a continued price increase at those prices.
On the other hand, large in the money clusters indicate key price ranges on-chain where a high amount of addresses (or volume of tokens) had previously been bought and would currently realize a profit if they sold today (because price is higher than their cost of acquisition). In examples like the ones shown above, more addresses in the money is likely to be positive for the network as there is less selling pressure from holders trying to break-even on their positions.
⭐️ Quick Tip: The Global In/Out of the Money is useful to obtain a holistic view of the profits of all addresses/tokens on the blockchain. For a narrowed down perspective on how addresses/tokens’ profits are expected to affect price action near-term make sure to check out the In/Out of the Money Around Price.