Definition. This chart compares the relative activity of small and large entities on the Bitcoin network via two oscillators: small-entity activity measured from median transfer volumes 🔵, and large-entity activity measured from mean transfer volumes 🔴, plotted alongside price (black). It takes into account the observable positive skewness of USD-denominated Bitcoin transaction volumes, whereby the median spent volume is typically less than the mean — indicating that smaller entities generally account for a larger frequency of sent transactions relative to larger entities.

Technical. The oscillators are constructed by taking the ratio between the 7-day MA and the 365-day MA of change-adjusted transfer volumes:

• Small Entities Activity = sma(Median Transfer Volume, 7) / sma(Median Transfer Volume, 365) 🔵
• Large Entities Activity = sma(Mean Transfer Volume, 7) / sma(Mean Transfer Volume, 365) 🔴

The mapping of median to small entities and mean to large entities rests on skewness: in statistics, skewness is the degree of asymmetry observed in a probability distribution (right/positive, left/negative, or zero), and in the positive skewness case the Mean > Median. Considering the historical transactional data for Bitcoin, the mean daily transfer volume has typically been larger than the median, so the on-chain transaction size distribution has positive skewness — small volume transactions occur with higher frequency, and the median therefore tracks the activity of small-size entities while the mean is dominated by large-size entities.

Interpretation. Tracking the trend of median transaction volumes provides a macro framework for assessing the activity level and demand of small-size entities:

• When small entities 🔵 exceed large entities 🔴, it typically suggests an influx of small size transactions, and is often associated with the excitement of bull markets and greater speculation.

• When the indicators are increasing, it can be considered a signal of higher demand from the relevant entities (short-term activity running above its yearly baseline).

• When the indicators are decreasing, it can be considered a signal of lower demand from the relevant entities.

Notes. Coined by CryptoVizArt (2022). Built from Median Transfer Volume (Change-Adjusted) and Mean Transfer Volume (Change-Adjusted). An entity-adjusted variant of this chart filters out transfers between addresses of the same entity.