The more you dive into crypto, the logical thing is that your sources of information will improve. Maybe you started with a couple of youtubers, then some Telegram channels and Twitter accounts.
Following the right Twitter accounts like @adamscochran, @Tetranode, @DegenSpartan, @tier10k will put you above average in terms of finding alpha and keeping up with relevant news.
But if you want to be above the 1%, you have to go directly to the source, the blockchain.
Ask yourself this:
What happen if you can follow the moves of the best traders in real time?
This is possible thanks to on-chain analysis, read the question again if you are not yet aware of the advantage of acquiring this skill.
In this article I will teach you how find “smart money” and save it in a telegram bot that will notify you of all its trades.
What is smart money? they are the wallets of excellent traders or insiders. We look for wallets that have consistent winning moves, are first to good projects/narratives, know when to sell, and trade big money.
Step 1: Find possible wallets
Finding this type of wallet is an art, there are several ways, what I usually do is look at the last winning project (we are looking for a new token, which has had a considerable increase in value and has good fundamentals).
They can also be found in special situations, such as the beginning of a narrative, or news. For example, the news of the rebranding of Facebook to Meta was a good entry to buy metaverse tokens like SAND or MANA. You could check which wallets bought and sold at the right time.
For this case we will use: Stargate.
I won’t delve into the project, basically, their token launched $0.5 and reached more than $4, so we will look for the first buyers of more than $20,000. (If it is a low MC project, the minimum quantity purchased would be lower).
First we copy the token contract, we can find it on CoinMarketCap or CoinGecko.
Then, we paste it in Etherscan, if the token is in another network then the explorer will be another. In the contract, we enter in the token. At the bottom of the page, we find the option to download the data.
It will take us to another page where we will have to select the date range, in these cases of new projects, I recommend selecting the first week from the launch. Then we complete the captcha and download the data.
After downloading the database, we can open it in Excel, there will be a lot of data (more than 5000 in this case), so we will have to apply different filters to reduce the results to about 50–300.
We will have to apply the following filters:
- Quantity: we filter the amount between $20,000 to $100,000 so it would be between 40,000 and 200,000 tokens ($0.5 per token).
- Method: in this case we only leave the “-” option, since it is the one that refers to the pre-sale. In other cases we could leave only transfers or exchanges.
- Duplicates: we filter all the duplicate values of the receiving wallets, this is done with the conditional format, I won’t stop to explain it, but there are many tutorials.
After this, we select all the remaining wallets (those in column F) and paste them into a new Excel. In my case, I had 114 wallets left, some of which are smart contracts, so there are ~100 wallets to analyze.
Step 2: Analyze the wallets
Now that we have a database of about 100 possible wallets, we have to know how to identify which ones are really “smart money”.
For this we will use DeBank and Zapper, where we can see their current portfolio, view transaction history and filter by networks/tokens.
To determine if a wallet is smart money, first I usually rule out wallets smaller than 6 figs, unless you’re looking for very small cap alpha hunters or an specific wallet, that’s best.
I then review the trades of different tokens, to determine if it has consistently winning moves.
This last point is the most tedious of the whole process, but it is important to spend time going through the history of the wallet, reviewing many of its trades to determine if it is worth following it.
To review a token, we simply go to the history, select the network, and then the token we want to filter.
We could start by filtering the STG token, we know it was a good buy, but we want to see if he sold at a good point. Then we continue to analyze the tokens in his current portfolio, if for example he has CVX, we could see the trades he made in that token.
I also usually filter the USDC trades, because when a user wants to sell his position, he usually does it in that token, in this way, we could see his past positions and start to analyze them. If for example he sold SPELL, we would filter this token to see if his moves were profitable.
Some processes can be facilitated with Zerion, because if you go to the history, put the name of the token and open it, you will be able to see a chart with the purchases and sales, as well as the profit of the trade.
If after analyzing +10 trades we determine that he is a consistently profitable trader, who usually enters at the beginning of good projects and knows how to take profits, then we find smart money.
As an example, I will leave you a smart money wallet that I found in this database, it had very good trades with STG, FXS, CVX and other tokens, use it practically: 0x94a468fcb53a043bf5cd95ef21892e02c71134be.
Step 3: Save the wallets
Once we start finding smart money, we have to save it in a new Excel, which will be our database. In addition, we will also save them in a Telegram bot, which will notify us of all of their trades in real time.
The bot is free, but they only allow us to save 20 wallets. Although with 2 Telegram accounts, we could save up to 40 wallets, which are more than enough, because following too many will only generate stress.
The bot is: EtherDrops
The bot allows you to perform some filters, I usually configure it so that it only shows me transactions of more than $10,000.
This is what the alerts look like:
Finally I would like to leave some advice:
- Do not blindly follow the moves of these wallets, just take them as a reference to do your own research.
- Bot filters don’t always work.
- All this is free, if you want to go to the next level, the Nansen payment tool will make it easy for you.
If you liked the article, you can follow me on Twitter: @0ctoshi
