The Art Of Tracking Wallets: Key Metrics for On-Chain Analysis
The beauty of crypto lies in its transparency.
Unlike traditional financial markets, where data often remains hidden behind closed doors, the blockchain offers a window into every wallet’s activities. Yet, with an overwhelming amount of data available, the true power lies in filtering and analyzing it through the lens of key metrics.
In this blog, we’ll explore the art of tracking crypto wallets and deciphering on-chain activities using key metrics. We’ll also delve into how platforms like Alphanomics simplify this process, enabling you to uncover the next big crypto investment.
1. The Basics:
- – Wallet Age: The age of a wallet, measured from its creation to its first transaction, can reveal significant insights. Older wallets often indicate experience and stability, as they’ve weathered the ups and downs of the crypto market.
- – Number of Wallet Activities: This metric reflects how actively a wallet is engaged with the blockchain. It encompasses a range of activities, from transferring tokens to interacting with various DeFi apps. A higher number of activities generally suggests a deeper understanding of the market and its opportunities.
- – Wallet Wealth Type: Categorizing a wallet’s wealth, from less than $100k to over $1 million, provides valuable context. It offers a glimpse into their financial ability and the magnitude of their commitment to crypto. The more they have, the more they have at stake.
- – Wallet Ranking: Wallet ranking denotes a wallet’s position relative to other top DEX participants. A higher ranking suggests a higher level of expertise in navigating the crypto markets. It’s an indicator of a wallet’s prowess in winning within the crypto space.
- – Wallet ROI: Return on Investment (ROI) is a crucial metric for assessing a wallet’s performance. It’s calculated by analyzing the wallet’s lifetime profit and loss. A better ROI signifies a more successful track record, indicating the wallet’s skill as an on-chain trader.
2. Portfolio Distribution
Understanding the composition of a wallet’s portfolio is fundamental. It involves examining the tokens it holds and their respective quantities. This metric provides insights into a wallet’s areas of expertise.
For example, if a wallet holds a significant number of meme coins and boasts a robust lifetime Profit and Loss (PnL), it indicates proficiency in meme coin trading. Conversely, if it holds a diverse range of DeFi tokens and has a solid lifetime PnL, it signals expertise in trading DeFi tokens. Alphanomics simplifies this assessment by offering a visual summary of portfolio distribution.
3. Traded Token History
When considering an investment in a specific token, delving into its trading history within a wallet is invaluable. Alphanomics facilitates this process by providing comprehensive insights into the token’s journey.
You can see when the token was first acquired, at what price, when it was sold, and the resulting ROI or realized PnL. This data allows you to analyze whether the wallet has a successful history with that particular token, aiding your investment decision-making process.
4. Wallet DEX Transactions
Transactions executed on decentralized exchanges (DEXs) such as Uniswap, Curve, and Sushiswap play a pivotal role in crypto. Monitoring these transactions within a wallet is crucial for several reasons. It provides insight into the wallet’s participation in decentralized finance (DeFi) activities and token swapping.
Additionally, it offers a glimpse into the wallet’s trading behavior and strategy. Alphanomics simplifies this process by providing a live stream of the most recent DEX transactions for any wallet, ensuring that you stay up to date with their on-chain activities.
5. External Transaction Activity
Beyond DEX activities, tracking external transactions is equally essential. This involves monitoring whether a wallet has moved tokens to other wallet types, such as centralized exchange (CEX) wallets, hardware wallets, or cold storage wallets. Each type of transaction signals a different aspect of the wallet’s investment strategy.
- – CEX Wallet Transactions: When tokens are transferred to a CEX wallet, it often indicates an intention to sell or trade. This transaction type is particularly valuable for understanding short-term intentions.
- – Cold Storage Transactions: Transfers to cold storage wallets suggest a long-term holding strategy. These transactions indicate a commitment to holding assets over extended periods.
By tracking these external transactions and their destinations, you gain insights into the wallet’s broader investment thesis. This data can serve as a reference point when constructing your own investment strategy. Alphanomics provides dedicated tabs for viewing token transfers and other transaction types, making it easy to access this critical information.
The “All Streams” tab offers an overview of all transactions made by the wallet, encompassing DEX and external wallet transfers.
Setting Up Alerts
Speed is everything in crypto. Prices can swing in a blink of an eye and you will end up missing great opportunities. This is why setting up alerts is very important.
One of the most powerful features offered by Alphanomics is the ability to set up alerts for wallets that pique your interest. Whether it’s a wallet you’re considering for investment or one you’re monitoring closely, Alphanomics’ Smart Alerts feature ensures you never miss a crucial move.
Wallet Tracking: Your Path to Finding the Next 100x Token
To supercharge your on-chain analysis and uncover the next top crypto investment, consider leveraging platforms like Alphanomics. It simplifies the process by providing real-time insights and visual representations of critical data. Sign up here!