🧘‍♂️ALERT: Smart Money Secrets

Market Meditations | December 22, 2021

3 Easy Steps

Dear Meditators

Since our first guide on finding NFT alpha using Nansen, there has been an influx of new tools that anyone can use to gain profitable insights into the market.

To help, we have updated our guide to demonstrate how you can use these tools to gain a competitive edge.

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Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool. 

? NFT Alpha Guide

Step 1: Asses the Macro Picture

When considering how to use Nansen for NFT insights, you’ll want to begin with the big picture. A powerful tool for this is the Bluechip Index. 

  • This tracks volume and price of the top 20 NFT projects, showing the overall health of the market. 

  • It currently indicates that we are in a downtrend and should carefully consider if it is the right time to enter any investments.

Bluechip Index

Nansen.ai: 22/12/2021 – Bluechip NFT Index. Market cap and volume over 3 months

Nansen includes other tools that can be used to sort through all NFT projects by key metrics. 

  • Smart Money Investment Returns. We can use this to understand potential profits in current conditions. Just as with the bluechip index – we have seen a downtrend over the previous 3 months showing a decreasing amount of returns to be made in the sector. To learn more about this check out this guide.

  • 24 Hour Volume. Sorting by 24 hour volume demonstrates the hottest projects in the crypto space. We can use the data to identify what projects are receiving the most attention and from this, find trending sectors. To learn more about this check out our first NFT alpha guide.

Step 2: Asses the Micro picture

After step 1, we understand the overall health of the market, how much profits are being made by the top performers and what is currently hot. We can now dive deeper into finding specific NFT projects. 

Smart Money Activity shows the top projects by smart money mints and can be used to identify projects that the most profitable wallets are entering into.

Smart Money Activity

Nansen.ai: 22/12/2021 – Smart Money Mints

  • In this case we can see a significant amount more smart minters entering Divine Wolves than anything else. 

  • Whilst we have focused on minting, this data is also available for smart money buys and sells – tracking all smart money activity. 

Step 3: Project Due Diligence

Upon completion of step 2, as well as our macro picture – we have identified specific projects that we can then now carry out due diligence on, before progressing any investment activity.

Average Price and Volume (Crypto Punks)

Nansen.ai: 22/12/2021 – Crypto Punks Volume and Price

  • This shows specific price and volume data for the largest NFT project – Crypto Punks

  • We can use this to understand the project’s trajectory. In line with the rest of the NFT market, this is currently in a downtrend except for one spike earlier this month due to the $10m sale of Punk #4156.

Other metrics that we like to use are, number of unique wallets, smart money activity and top balances. With Nansen you can now even consider individual traits to analyze exactly which NFTs to buy in any given collection. 

Step 4: Finding Confluence

As with any component of a trading system, one source is never enough. After you have identified potential investments always make sure that:

(1) It fits in with your overall portfolio strategy and risk tolerance.

(2) Any narratives fit into your understanding of current news and events. To help you keep on top of the markets, focus on high quality sources (such as Market Meditations).

Never have there been better tools to gain an edge over the market. With Nansen we are able to dive deep into the NFT space, generating profitable insights. Through our process, we have found that the market is currently in a downtrend, that profits are harder to find and we have identified several projects that may outperform the sector. Follow this guide and you will also be able to generate insights that boost your returns.

With Nansen’s On-Chain data, you can secure an edge in the crypto and NFT markets:

  • ? Exciting New Opportunities. See where funds are moving their money.

  • ? Perform Due Diligence. Get more information on projects or tokens.

  • ? Defend Your Positions. Create smart alerts to track over 100 million ETH wallets.

  • ? Track The Biggest NFT Traders. See what the most profitable NFT wallets are investing in

To grow your crypto portfolio today check out the Nansen website. Currently, they are running a 7 day trial for just $9. Link here ?

? Good Will Pumping

Followers of CNBC’s Jim Cramer may have noticed his tweet yesterday referring to a potential “Santa Claus rally”

  • The “Santa Claus rally” is well-known enough to have its own Investopedia page, describing it as “a sustained increase in the stock market that occurs in the last week of December through the first two trading days in January”.

  • In the stock market, more than two-thirds of Decembers dating back to the 1960s have resulted in positive gains for shareholders.

  • Cramer summarised this by sayingIf you bought today and you just held on even for six days, you made money almost every single year”.

Theories for this phenomenon include:

  1. Institutional investors and traders going on leave

  2. Low volume combined with increased optimism and holiday money spending

Is it the same for crypto? 

Bad news. Analysis of cryptocurrency data shows that this market is less likely to have a “Santa Claus rally”. 

Only four of the twelve years Bitcoin has existed have been positive over this period. We will need to look elsewhere, it seems.

?Will Binance Find A Home?

Binance, the crypto exchange founded by Changpeng Zhao, has had its share of headlines over the years, especially regarding their corporate headquarters. 

  • Binance was originally founded in China, but Zhao moved the headquarters to Japan ahead of the Chinese crypto ban.  

  • After Japan began tightening crypto regulations, the agency moved headquarters again, this time to Malta. When the media began referring to Binance as a Malta-based crypto company, the Malta Financial Services Authority issued a public statement that Binance was not authorized by the MFSA to operate in the crypto sphere. Then the Cayman Island rumors began.

Although Zhao had hinted of France or Ireland, Binance appears to have decided on a home place in Dubai, after signing an agreement with the Dubai World Trade Centre Authority to help develop a crypto regulatory framework. 

The Block reported that the Dubai World Trade Centre is set to become a crypto regulator in the United Arab Emirates. 

Will Dubai become the home of Binance headquarters? Not only has CZ called the government there very progressive, but he has purchased his first home there, which would appear to be a very good sign.

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??‍♂️✍️ Stories in this newsletter were written by D. Beverly, Isambard FA, Nick T., Max P., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Gerasimos P.

Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.

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