Outsmart Whales 🐋 & Evade Dumps with Alerts🚨
During these times of general downturn, it is equally important to learn how to play defense
In this article I’ll cover:
Understanding when to exit your position because a whale might dump on you.
How to set alerts and get notified for wallets using nansen or etherscan.
When asked which low cap coins I could use as an example, one of my followers asked me about $SILO, so let’s use that as a case study. But you can apply the same method for any altcoin of choice, especially lowcaps.
$SILO FINANCE — CASE STUDY
I’ll explain in this case study what steps you can take to play defense for a relatively small marketcap tokens.
As is usual we need etherscan or Nansen to do our analysis.
Get your contract address from Coingecko.
One place to start is:
Looking at the $SILO price chart, zoom out and see where the unusual buys and sells where.
Alternatively you can find the biggest holders and see one-by-one whether they are manipulating price.
We can see some interesting price movement here on the 28th of February.
Big buyer(s) stepping in. Also the last week of January has some abnormal price movement.
Zooming out we can see that the buys of the 28th of February have some significance as it effectively set the floor.
→ So let’s start by looking at movements during 28th of February for this token (SILO).
Nansen has a wonderful feature where you can look at the token movement during a specific window in time.
Alternatively what you can do is use Etherscan and download all the transfer data during a specific time window via excel as shown in the photos below:
But for my example I’ll use Nansen:
The easy auction and the smart LP cancel each other out.
Also you could do some research and find out that easy auction is some sort of third party auction/presale/smart contract.
So the third one bought almost 1.2 million $SILO tokens. Nothing else comes close.
So digging into the Token millionaire we find out his wallet address is:
0x23a5efe19aa966388e132077d733672cf5798c03
If we look at the top holders of $SILO token, he is the first (non smart contract) top dog by a landslide owning almost 3% of the token supply.
Small Recap
What we’ve done so far is:
Find price manipulation / unusual price movement in chart
See if there was one or two big whales causing it.
We found one whale of interest that fit the bill
Now comes the important part:
We are digging into historic behavior of this whale and see if we can use this to our advantage.
How are we doing this?
Using etherscan or looking at the wallet profiler for the $SILO on Nansen.
We can then look at his past behavior and see if we can draw any conclusions from that.
$SILO transactions from whale ordered by dateI put this information on a chart to make it easier to visualize.
Observations from chart and data:
He splits up his sells (usually) and splits up his buys
75% of the time his sells marked the top.
2 out of 2 times his buys marked a local bottom.
He interacts with three contract addresses, 1inch, vyper contract, curve.fi for his sells.
With 30 min, 3 min, 2hr and 4hours between the four large transactions on April 13th.
And also Jan 3rd his sells are split up between 3 large transactions.
I can’t emphasize enough how the splitting up of buys and sells is especially important behaviour.
Liquidity
Looking at Uniswap a $3.4k sell in ETH would push price down by 2%.
So you can do the math and realise his 0.5 million $ sells have a large impact on price.
It’s worse for USDC.
Looking at Curve.fi the liquidity is a bit thicker as they do 3–4x the volume.
But still, liquidity is pretty thin.
Why am I mentioning this?
Because his buys have a large impact on price. With small cap tokens with bad liquidity, you can see how a whale who only owns 3% of the total supply can have a disproportionate effect on price.
So what can we do with this information:
🚨Actionable Alerts🚨
Historically you would have done well if you sold (part of) position ASAP as soon as first sell order comes through, buy back later that day/next day for an easy 10–30% in $SILO tokens to compound your position.
You would have also done very well in the short term if you had bought right after his first buy. Seeing how there’s enough time between those buys historically, you could set up an alert and buy with enough time.
Conclusion:
If this is a long term hold, you want to keep a close eye on this whale’s movements and see when he starts to lose confidence in the protocol. If he sells into strength, because of hype of this protocol, could be a good idea to take profits along with him.
Also his buys were at strategic moments. He has been defending the 0.25$ floor twice with his buys. They weren’t random, they were both at similar price levels. So if he doesn’t defend this level in the future get the f**k out.
If he does set the floor again, you are swinging with the wind in your back.
As a last note, some coins will be harder to analyze. Especially the older the project and the bigger the project the more convoluted it becomes. Don’t expect to find one whale on every project. Sometimes you may have to look at the top 10–30 holders and characterize their movements and look for patterns.
How to set up alerts?
If you make a free account with etherscan you can click on your name and then select “Watch List’ from the dropdown menu.
It should now show up with “email notification” on the right.
The downside of etherscan is that you don’t have the option to exclude certain tokens.
So some extremely active whales will spam you to death with their notifications of incoming and outgoing transactions (that are irrelevant to you).
Nansen has the possibility to set up smart alerts where you can exclude tokens, include only certain tokens, even a minimum usd value etc.
I have used both successfully in the past however.
Last thoughts
This was one case study.
Some coins will be harder to analyze.
On-chain analysis can be time consuming and often it will not be as clear as in this example.
Especially the older and bigger the project and the more convoluted it becomes.
Don’t expect to find one or two whales on every project.
Sometimes you may have to look at the top 10–30 holders and characterize their movements and look for patterns.
But even if you set alerts for just the top 10 holders and know when they’re selling, you’re ahead of most other people!
Hope this helps!
Oh, and none of this is investment advice. I’m not a professional and mostly am stumbling my way through the world the same way I was at age 13. Just documenting and sharing some thoughts and none of it is a science. I, like everyone else, am simply an aged baby walking blindfolded into a forest, startled by my own humanity.