Social networks
A place to find wallet addresses of the right targets. Not all investors keep their anonymity, many have public social network accounts. Twitter and Discord are two of the most popular platforms in the crypto community. Such information can be found on personal blogs or any other platforms that the target uses. Before searching for a wallet address, you need to know the target's ID or username on a particular social network.
A place to find wallet addresses of the right targets. Not all investors keep their anonymity, many have public social network accounts. Twitter and Discord are two of the most popular platforms in the crypto community. Such information can be found on personal blogs or any other platforms that the target uses. Before searching for a wallet address, you need to know the target's ID or username on a particular social network.
Specialized services
Today, there are a huge number of services that provide a wide variety of blockchain information. By and large, they do the same job as explorers - scanning a blockchain and getting data out of it. But there is an important difference, explorer is a service that scans only one blockchain, providing the most general information and analytics. Platforms other than explorers can vary widely. They provide data in a more convenient form, allow you to track your own wallet balances, can be like a social network, allowing you to publish posts and communicate with other users. Analytical services are very useful. They generate information from the received data - all kinds of coefficients, indicators, graphs, analytical reports. Data is collected most often from many blockchains.
Today, there are a huge number of services that provide a wide variety of blockchain information. By and large, they do the same job as explorers - scanning a blockchain and getting data out of it. But there is an important difference, explorer is a service that scans only one blockchain, providing the most general information and analytics. Platforms other than explorers can vary widely. They provide data in a more convenient form, allow you to track your own wallet balances, can be like a social network, allowing you to publish posts and communicate with other users. Analytical services are very useful. They generate information from the received data - all kinds of coefficients, indicators, graphs, analytical reports. Data is collected most often from many blockchains.
Which services can be used?
Basically we only need an address and its transaction history. Services that can help you find a worthy target for further research are plentiful. They may not only be in the form of websites, but also as Telegram bots. The choice may also depend on how convenient a particular service seems to the researcher. Here are some examples.
Basically we only need an address and its transaction history. Services that can help you find a worthy target for further research are plentiful. They may not only be in the form of websites, but also as Telegram bots. The choice may also depend on how convenient a particular service seems to the researcher. Here are some examples.
Whale Alert
This is the most famous Telegram bot that publishes real-time information about large transactions. Under each post you can find out useful and not so useful information from commenters.
Arkham
This is a platform that has been mentioned more than once in my researches. It specializes in tracking information from different blockchains, the list of which is regularly updated. One of its useful options is a good visualizer of links between wallets. Another interesting feature is that users can name addresses. And these names can be seen by other users. Thus, you can use this service to find out more information about a target address if it has been given a name.
This is the most famous Telegram bot that publishes real-time information about large transactions. Under each post you can find out useful and not so useful information from commenters.
Arkham
This is a platform that has been mentioned more than once in my researches. It specializes in tracking information from different blockchains, the list of which is regularly updated. One of its useful options is a good visualizer of links between wallets. Another interesting feature is that users can name addresses. And these names can be seen by other users. Thus, you can use this service to find out more information about a target address if it has been given a name.
Debank
This service started as a portfolio tracker, now it has become a platform providing a wide range of services. Here you can track balances and transactions of any wallet in all popular blockchains, the list of which is constantly updated. If assets are locked in staking or lending, this will also be displayed. This way, you can keep track of where the target is earning passive income. Debank has become like a social network in that you can publish posts and attract followers.
To understand its scale, you need to know that the platform tracks 15 addresses with a balance of more than $1 billion. Like many other popular services, Debank provides a number of features on a paid basis. There is a section on the website called “Whales”. Here are the addresses in decreasing order of balance. From here, you can also start looking for a target.
This service started as a portfolio tracker, now it has become a platform providing a wide range of services. Here you can track balances and transactions of any wallet in all popular blockchains, the list of which is constantly updated. If assets are locked in staking or lending, this will also be displayed. This way, you can keep track of where the target is earning passive income. Debank has become like a social network in that you can publish posts and attract followers.
To understand its scale, you need to know that the platform tracks 15 addresses with a balance of more than $1 billion. Like many other popular services, Debank provides a number of features on a paid basis. There is a section on the website called “Whales”. Here are the addresses in decreasing order of balance. From here, you can also start looking for a target.
DeBank
DeBank | Your go-to portfolio tracker for Ethereum and EVM
Patterns
It would be logical to assume that owners of target addresses perform transactions according to a certain strategy, i.e. they pursue some goal. Next I will give examples of some of the patterns and how they can be interpreted. You must remember that these patterns are hypothetical and probabilistic. For accurate interpretation, you need to know the strategy and intent of the target for each specific transaction. There is also the possibility that the target is trying to confuse the market. This is most true for addresses with very large balances or shares of tokens, as these are the ones the market pays the most attention to.
It would be logical to assume that owners of target addresses perform transactions according to a certain strategy, i.e. they pursue some goal. Next I will give examples of some of the patterns and how they can be interpreted. You must remember that these patterns are hypothetical and probabilistic. For accurate interpretation, you need to know the strategy and intent of the target for each specific transaction. There is also the possibility that the target is trying to confuse the market. This is most true for addresses with very large balances or shares of tokens, as these are the ones the market pays the most attention to.
•If the entity has transferred cryptocurrency from personal wallets to exchanges, it is possible that it intends to sell it.
•When a target transfers cryptocurrency from an exchange to a personal wallet, it usually points to long-term holding.
•When an entity transfers stablecoins from a personal wallet to an exchange, it may indicate a desire to buy cryptocurrency and a potential uptrend in the market.
•And, on the other way around, if it withdraws stablecoins from an exchange, it could indicate hedging and a potential down trend.
•When a whale moves assets between exchanges, it's probably because it wants to make an arbitrage deal.
•On the other hand, when a whale moves cryptocurrency between wallets, the purpose of these transactions is difficult to understand. These may be OTC (over-the-counter) trades or they may have other reasons that are not clear.
•When a target transfers cryptocurrency from an exchange to a personal wallet, it usually points to long-term holding.
•When an entity transfers stablecoins from a personal wallet to an exchange, it may indicate a desire to buy cryptocurrency and a potential uptrend in the market.
•And, on the other way around, if it withdraws stablecoins from an exchange, it could indicate hedging and a potential down trend.
•When a whale moves assets between exchanges, it's probably because it wants to make an arbitrage deal.
•On the other hand, when a whale moves cryptocurrency between wallets, the purpose of these transactions is difficult to understand. These may be OTC (over-the-counter) trades or they may have other reasons that are not clear.
Strategies for finding a target
Despite the fact that there are many services for address tracking, all of them provide huge amounts of information in which it is difficult to find the information of interest in the context of this research. Therefore, we need a search strategy that provides direction and makes it easier to find a target.
Each researcher has to find his own strategy, we will try to generate a few of them to put into practice.
Despite the fact that there are many services for address tracking, all of them provide huge amounts of information in which it is difficult to find the information of interest in the context of this research. Therefore, we need a search strategy that provides direction and makes it easier to find a target.
Each researcher has to find his own strategy, we will try to generate a few of them to put into practice.
1. The most obvious way is to find an address whose balance has been steadily increasing and investigate the transactions after which the balance increase occurred. We need to pay attention to buying and selling equal amounts of a particular token. A target can buy a token in more than one transaction. These transactions may be concentrated in a short time frame or in a short price range. The asset may be sold in several stages rather than in a single transaction. It all depends on the size of the target address balance. If it is a successful but not large investor, he can buy and sell in one transaction. The disadvantage of the strategy is the large amount of manual work involved. Since profits can be withdrawn to other addresses and such transactions need to be defined separately. On the other hand, all processes can be automated with software.
2. The second way is to look for a token that has had a "pump and dump" and has had a price increase of 100% or more. We need to find addresses that bought up the token before the pump and sold it during the price increase. Various shitcoins are often pumped, sometimes with the help of crypto whales. This way we can find those who specialize in such speculations and copy their trades.
3. Often a token's price grows well after listing on a major exchange like Binance, Coinbase, Bybit, etc. In this case the strategy is obvious, we need to find a token that has been listed on an exchange and we find the addresses that bought it up before listing it. It is logical to assume that some exchange staff may know about the listing and try to make a profit. Tracking them would be a good way to get insides.
Real case
Now we need to check all the information in practice. Let's use strategy #2 and look for a memcoin that has been pumped. Why are we going to work with memcoin? Because these tokens are trash and have no utility, they are only pumped up by hype. And since that is the case, we are interested in people who know how to profit from it.
Now we need to check all the information in practice. Let's use strategy #2 and look for a memcoin that has been pumped. Why are we going to work with memcoin? Because these tokens are trash and have no utility, they are only pumped up by hype. And since that is the case, we are interested in people who know how to profit from it.
1. There is memcoin ranking on Coinmarketcap. We need to study their price charts and figure out which one had a sharp increase in price. As a result of the search, a contender has been found, and it is FLOKI. In early January 2023, the token price was around $0.000007 and reached $0.000068 on February 16.
Now let's find the addresses that were buying up large amounts of token in early January. The FLOKI token exists on two networks, Ethereum and BNB Chain. Let's look for the target address in BNB. Why there? It doesn't matter, it's just that BNB Chain has much cheaper transaction fees. And it's favorable for the not-so-large investors. Let's assume that their strategy is to maximize profits with a small investment, and this strategy suits us. So, we were able to find this transaction. On Jan. 3, the target address bought 113.58 million FLOKI on Pancakeswap.
3. Let's explore the target in more detail, and for that we'll use the Arkham platform. The address balance is in the $43k-$331k range, and that's good. The average investor may not have enough money to copy the strategy of an investor who has millions of dollars. There are a lot of different shitcoins in the target's wallet, which may indicate that the owner specializes in these kinds of tokens. This is a hypothesis, since we don't know this person (or organization) and all our assumptions are probabilistic. Let's take a look at the history of the target's interaction with the FLOKI token in the BNB Chain.
And it all becomes clear. On December 8, 2022 and January 3, 2023, the address has bought a total of 141.896 million FLOKI tokens. And has sold out all the tokens between January 22 and January 28. The total purchase amount is $1157.78 and gas costs. The amount raised after the token sale is $2025.26 minus gas costs. Thus, in 51 days, the target realized a profit of $867.48 or 74.93% excluding fees.
Here's another interesting fact to ponder. The wallet owner finished selling tokens on January 28, in fact at the very beginning of the price increase. This can be explained in many ways, but perhaps it indicates that this investor is being cautious. So he's worthy of studying his activities more thoroughly for now.
So, our strategy is successfully confirmed. Addresses that buy up shitcoins before the pump and successfully sell them during the price rise do exist. You could argue that in February 2023, there was localized growth in the entire crypto market and the FLOKI has risen with the rest of the cryptocurrency. Yeah, it's possible.
But speculating with shitcoin is riskier than investing in a token with strong fundamentals. And our task was to find people who "know something". Which we have done very well in this study.
So, our strategy is successfully confirmed. Addresses that buy up shitcoins before the pump and successfully sell them during the price rise do exist. You could argue that in February 2023, there was localized growth in the entire crypto market and the FLOKI has risen with the rest of the cryptocurrency. Yeah, it's possible.
But speculating with shitcoin is riskier than investing in a token with strong fundamentals. And our task was to find people who "know something". Which we have done very well in this study.
Errors and how to avoid them
It is important to realize that simply copying the trades of a target address will not necessarily make a profit. The person who copies doesn't know the strategy of the investor they are following. Information about her trades (assets, direction and volume of the trade) is only data for further careful analysis, not an instruction for action. You also need to keep in mind that any investor is also a human being who has emotions. He or she can both win the market and lose to it. Any investor can act illogically and irrationally.
It can be assumed that large investors, knowing that their actions are being tracked, can manipulate the market by creating false signals. Therefore, tracking small targets like the one we investigated can cut off such a disadvantage.
It is important to realize that simply copying the trades of a target address will not necessarily make a profit. The person who copies doesn't know the strategy of the investor they are following. Information about her trades (assets, direction and volume of the trade) is only data for further careful analysis, not an instruction for action. You also need to keep in mind that any investor is also a human being who has emotions. He or she can both win the market and lose to it. Any investor can act illogically and irrationally.
It can be assumed that large investors, knowing that their actions are being tracked, can manipulate the market by creating false signals. Therefore, tracking small targets like the one we investigated can cut off such a disadvantage.
You don't need to react to every asset movement signal. For example "10,000 bitcoins have moved to the address of exchange X". And everyone started selling bitcoin, as cryptocurrency amateurs interpret the news unequivocally - bitcoin will fall in value. After all, that's what it was moved to the exchange for, right? It should be understood that not everything is so unambiguous, the above conclusion is only one of the possible scenarios. And there are many others.
For example, rebalancing between exchange wallets, etc. That is, selling these tokens on the market is just one of many options, but this "news" fulfills its role as if no other options exist. Another case, what prevents a whale from selling off an asset without attracting attention? For this purpose, it is enough to split the balance into ten (or a hundred) addresses. Nobody canceled OTC (over-the-counter) transactions either.
For example, rebalancing between exchange wallets, etc. That is, selling these tokens on the market is just one of many options, but this "news" fulfills its role as if no other options exist. Another case, what prevents a whale from selling off an asset without attracting attention? For this purpose, it is enough to split the balance into ten (or a hundred) addresses. Nobody canceled OTC (over-the-counter) transactions either.
Conclusion
The case studied in this research is just an single case study of a particular target address. It perfectly confirmed our hypothesis that making money by copying the actions of other investors is possible. But, just as an experienced investor studies each asset before adding it to their portfolio, so a smart copy-investor must study their target to understand what they are doing and for what purpose. Even such a seems simple at first glance method of earning money actually requires painstaking research work. Ideally, you should find one or several target addresses and scrupulously study their actions, understand their way of thinking, and study their strategy. And only then should you proceed with transactions.
The case studied in this research is just an single case study of a particular target address. It perfectly confirmed our hypothesis that making money by copying the actions of other investors is possible. But, just as an experienced investor studies each asset before adding it to their portfolio, so a smart copy-investor must study their target to understand what they are doing and for what purpose. Even such a seems simple at first glance method of earning money actually requires painstaking research work. Ideally, you should find one or several target addresses and scrupulously study their actions, understand their way of thinking, and study their strategy. And only then should you proceed with transactions.