Identifying Hot Tokens – The Synopsis

Lesson 1: Identifying Hot Opportunities

This focused on the first stage of discovering profit opportunities: using Nansen to find what the most successful crypto investors are doing right now:

(1) Look at smart money token holdings. Nansen shows the flow of tokens into smart money addresses – one method of spotting what top crypto investors are doing with their assets.

(2) Sort the data to identify more opportunities. By sorting the data using variables such as smart money segments, we can find the most suitable opportunities for our trading system.

Applied to Today: Smart Money Token Holdings

Nansen.ai:  02/03/2022 – Smart Money Token Flows

• 3 of the top 5 coins are well known DeFi assets that facilitate earning yield. This demonstrates that smart money is currently flowing into low risk yield opportunities.
• 2 of the top 5 are less known tokens that we may want to dive deeper into, taking into consideration that these are very high risk with more due diligence required.

To find the full lesson, check out part 1 of the series.

Lesson 2: Understanding Project Fundamentals

Our second lesson considered diving into project fundamentals to understand what metrics we can use to aid our decision making process:

(1) Live token distribution. This identifies the risk of one wallet holding too great a percentage of the supply.

(2) Measure adoption through the number of unique wallet addresses.

Applied to today: $BETA token

Nansen.ai:  02/03/2022 – Top Holders of $BETA Token

• Whilst there are two smart money investors in the top 5 holders, the project’s wallet holds 85% of the supply. Further research is required to understand why this is the case.

To find the full lesson, check out part 2 of the series.

Lesson 3: Following Top Crypto Investors

Our final lesson focused on following the activity of established investors:

(1) Consider top crypto investors who hold the subject token. Using Nansen we can establish which smart money wallet addresses have shown faith in the project.

(2) Dive deeper into whale transactions. Once these wallets are identified, we are able to examine exactly what these investors are doing with the token.

Applied to today: $BETA Token

Nansen.ai:  02/03/2022 – Top Smart Money Holders for $BETA token

• There is an abundance of established funds invested in the project; however with the current information at our disposal, we are not aware of their involvement.
• We would therefore look deeper into these addresses to understand how these wallets came to own these tokens.

To find the full lesson, check out part 3 of the series.

Conclusion

Identifying hot tokens can uncover huge opportunities for profits and having the right tools is crucial. Using Nansen we are able to find what the most successful crypto investors are doing and then dive deeper to understand why.