The most valuable alpha is on-chain.
Here's the ultimate guide to interpreting on-chain data to your advantage🧵
Here's the ultimate guide to interpreting on-chain data to your advantage🧵
In this thread I'll go over:
• Venture Capitalists' activity
• Unique contracts deployed
• Liquidation levels
• Top balance changes
• CEX Outflows
All of these can be analyzed using free tools.
Here's how I do it:
• Venture Capitalists' activity
• Unique contracts deployed
• Liquidation levels
• Top balance changes
• CEX Outflows
All of these can be analyzed using free tools.
Here's how I do it:
1. Venture Capitalists' activity
Some VCs have access to insider information.
@0xWatchers VC Watch dashboard helps you analyze their on-chain activity in real-time:
• what they're buying
• what they're selling
• what dApps they're using
Some VCs have access to insider information.
@0xWatchers VC Watch dashboard helps you analyze their on-chain activity in real-time:
• what they're buying
• what they're selling
• what dApps they're using
I use the 'Latest activity' section to discover small caps that multiple VCs are buying.
You can filter their transactions by the transfer value. (eg. min. $1M)
VCs are doing a lot of transactions, and in this way, I save time when digging into their on-chain activity.
You can filter their transactions by the transfer value. (eg. min. $1M)
VCs are doing a lot of transactions, and in this way, I save time when digging into their on-chain activity.
2. Unique contracts deployed
Where's innovation occurring?
Looking at the nr. of unique contracts deployed on @Artemis__xyz can give you the answer.
e.g. Arbitrum has seen a surge in devs' activity on 14/11/2022.
Since then, many Arbitrum tokens have outperformed the market.
Where's innovation occurring?
Looking at the nr. of unique contracts deployed on @Artemis__xyz can give you the answer.
e.g. Arbitrum has seen a surge in devs' activity on 14/11/2022.
Since then, many Arbitrum tokens have outperformed the market.
3. Liquidations levels
Many sudden price decreases are caused by large liquidations.
Keeping an eye on liquidations levels in DeFi can alert you to potential price drops.
Fortunately, DeFillama has a liquidations dashboard for that.
Many sudden price decreases are caused by large liquidations.
Keeping an eye on liquidations levels in DeFi can alert you to potential price drops.
Fortunately, DeFillama has a liquidations dashboard for that.
How I use it:
e.g. When the price of ETH is getting closer to a massive liquidation level, I set buy limit orders well below it.
If the ETH price drops to that liquidation level, a massive sell-off will likely occur.
e.g. When the price of ETH is getting closer to a massive liquidation level, I set buy limit orders well below it.
If the ETH price drops to that liquidation level, a massive sell-off will likely occur.
4. Balance changes
Before buying a token, I ask myself:
What are the whales doing?
Are they buying more? Or selling?
@0xWatchers allows you to check the top balance changes in the past 7 days for thousands of tokens.
Before buying a token, I ask myself:
What are the whales doing?
Are they buying more? Or selling?
@0xWatchers allows you to check the top balance changes in the past 7 days for thousands of tokens.
If whales are withdrawing tokens from CEXs to their own wallet or buying them on a DEX, this is a bullish sign.
If whales are depositing large amounts of a certain token on CEXs, this is usually bearish.
If whales are depositing large amounts of a certain token on CEXs, this is usually bearish.
5. CEX outflows
Big CEX outflows can indicate two things:
• whales accumulated tokens for the long term and they are moving them to their own wallets
This can be a bullish signal.
•there's an ongoing bank run (in this case, consider withdrawing your assets) 🔴
Big CEX outflows can indicate two things:
• whales accumulated tokens for the long term and they are moving them to their own wallets
This can be a bullish signal.
•there's an ongoing bank run (in this case, consider withdrawing your assets) 🔴
@DefiLlama CEX Transparency dashboard displays CEX inflows and outflows.
By clicking on a CEX from that list, you can also check the top token inflows.
This can give you an idea of what tokens whales are willing to sell.
By clicking on a CEX from that list, you can also check the top token inflows.
This can give you an idea of what tokens whales are willing to sell.
To conclude, on-chain data can be extremely useful.
By leveraging it, you can gain an unfair advantage.
But don't take investing decisions purely based on the on-chain activity of certain wallets.
At the end of the day, even some of the largest VCs got wrecked last year.
By leveraging it, you can gain an unfair advantage.
But don't take investing decisions purely based on the on-chain activity of certain wallets.
At the end of the day, even some of the largest VCs got wrecked last year.
That's it!
I hope you find this thread helpful.
Follow me @TheDeFinvestor for more.
Like & Retweet the first tweet below if you can:
I hope you find this thread helpful.
Follow me @TheDeFinvestor for more.
Like & Retweet the first tweet below if you can:
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