Onchain Data Alpha - How to Interpret Data to Your Advantage
[1] The activities of venture capitalists can be monitored through the VC Watch dashboard on Watchers.pro [https://watchers.pro/]. This tool allows you to analyze the on-chain activity of VCs in real-time, including what they are buying, selling, and the decentralized applications they are utilizing. By using the 'Latest Activity' section, you can identify small-cap investments that multiple VCs are making. Additionally, you have the option to filter their transactions by transfer value, for example, transactions worth at least $1 million. With the high volume of transactions that VCs make, using this dashboard saves time when analyzing their on-chain activities.
[2] Where is innovation taking place? To determine this, you can look at the number of unique contracts deployed on Artemis.xyz [https://app.artemis.xyz/dashboard]. For example, on 14/11/2022, there was a significant increase in developer activity on Arbitrum. Following this, many tokens related to Arbitrum have outperformed the market.
[3] Many sudden price declines are a result of high levels of liquidation. To anticipate potential price drops in DeFi, it is important to monitor liquidation levels. DeFillama [https://defillama.com/liquidations/] offers a liquidations dashboard to assist in this task. One way to utilize this resource is to set buy limit orders well below a massive liquidation level when the price of an asset, such as ETH, is getting close to it. If the price of the asset reaches the liquidation level, a significant sell-off is expected to occur.
[4] When considering the purchase of a token, it is important to ask what the large investors, commonly referred to as "whales," are doing. Are they increasing their holdings or selling them? Watchers.pro provides the ability to examine the top balance changes for thousands of tokens over the past 7 days. If whales are transferring tokens from centralized exchanges to their own wallets or purchasing them on decentralized exchanges, this is typically a positive sign. On the other hand, if whales are depositing significant amounts of a particular token onto centralized exchanges, this is generally seen as a bearish signal.
[5] Large outflows from centralized exchanges (CEX) can indicate two potential scenarios:
- - Whales have accumulated tokens for long-term investment and are transferring them to their own wallets, which is a bullish signal. - - A bank run is underway, and it may be wise to withdraw your assets.
The CEX Transparency dashboard on DefiLlama displays both CEX inflows and outflows. By selecting a specific CEX from the list, you can also see the top token inflows, which can provide insight into which tokens whales are willing to sell.
In conclusion, on-chain data can be a highly valuable tool in your investment strategy. By utilizing this information, you can gain a significant advantage over others. However, it is important to not base all of your investment decisions solely on the on-chain activity of certain wallets. Ultimately, even some of the largest venture capitalists suffered significant losses last year. #DYOR
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Onchain Data Alpha - How to Interpret Data to Your Advantage
[1] The activities of venture capitalists can be monitored through the VC Watch dashboard on Watchers.pro [https://watchers.pro/]. This tool allows you to analyze the on-chain activity of VCs in real-time, including what they are buying, selling, and the decentralized applications they are utilizing. By using the 'Latest Activity' section, you can identify small-cap investments that multiple VCs are making. Additionally, you have the option to filter their transactions by transfer value, for example, transactions worth at least $1 million. With the high volume of transactions that VCs make, using this dashboard saves time when analyzing their on-chain activities.
[2] Where is innovation taking place? To determine this, you can look at the number of unique contracts deployed on Artemis.xyz [https://app.artemis.xyz/dashboard]. For example, on 14/11/2022, there was a significant increase in developer activity on Arbitrum. Following this, many tokens related to Arbitrum have outperformed the market.
[3] Many sudden price declines are a result of high levels of liquidation. To anticipate potential price drops in DeFi, it is important to monitor liquidation levels. DeFillama [https://defillama.com/liquidations/] offers a liquidations dashboard to assist in this task. One way to utilize this resource is to set buy limit orders well below a massive liquidation level when the price of an asset, such as ETH, is getting close to it. If the price of the asset reaches the liquidation level, a significant sell-off is expected to occur.
[4] When considering the purchase of a token, it is important to ask what the large investors, commonly referred to as "whales," are doing. Are they increasing their holdings or selling them? Watchers.pro provides the ability to examine the top balance changes for thousands of tokens over the past 7 days. If whales are transferring tokens from centralized exchanges to their own wallets or purchasing them on decentralized exchanges, this is typically a positive sign. On the other hand, if whales are depositing significant amounts of a particular token onto centralized exchanges, this is generally seen as a bearish signal.
[5] Large outflows from centralized exchanges (CEX) can indicate two potential scenarios:
- - Whales have accumulated tokens for long-term investment and are transferring them to their own wallets, which is a bullish signal.
- - A bank run is underway, and it may be wise to withdraw your assets.
The CEX Transparency dashboard on DefiLlama displays both CEX inflows and outflows. By selecting a specific CEX from the list, you can also see the top token inflows, which can provide insight into which tokens whales are willing to sell.
In conclusion, on-chain data can be a highly valuable tool in your investment strategy. By utilizing this information, you can gain a significant advantage over others. However, it is important to not base all of your investment decisions solely on the on-chain activity of certain wallets. Ultimately, even some of the largest venture capitalists suffered significant losses last year. #DYOR