๐จ Avoiding Pitfalls with โOn-Chain Dataโ: I Dodged 3 Big Sell-offs โ Beginners Can Learn Too ๐ก
The first time I heard about โon-chain dataโ, it felt so professional ๐ค โ I thought only experts could understand it.
Until 2022, I almost bought a rapidly rising altcoin, but my friend told me to check the holding addresses using Nansen.
I found:
๐ Top 10 holders = 60% of supply
๐ They had been quietly reducing their holdings
โ ๏ธ This was a signal that big holders were about to sell, so I backed off โ that coin later dropped 70% in 3 days!
Since then, I made checking on-chain data a mandatory step before trading. I developed a โtwo-look techniqueโ beginners can understand:
1๏ธโฃ Look at the dispersion of holding addresses
If the top 100 holders have >50% of the supply, itโs like a small group holding most of the cake ๐ฐ โ they can share (sell) anytime. Too risky!
2๏ธโฃ Look at big holdersโ movements
Search the coin on Nansen and check โlarge transfersโ ๐
If many big holders are moving coins to exchanges recently, theyโre likely selling โ donโt buy at that time!
๐ก Example: My cousin wanted to invest in a coin. She checked on-chain data and found:
๐ Top 5 holders = 70% of supply
๐ค Still transferring to exchanges
She decisively backed off. โ
In reality, on-chain data isnโt that hard. Itโs like checking buyer reviews when shopping online ๐ โ it shows the real situation behind the coin instead of being fooled by price spikes ๐น.
๐ Pro tip: Professional tools arenโt far from you. Spend 10 minutes learning basic operations, and you add an extra layer of protection.
You donโt need to be an expert; just knowing a bit more than others can help you avoid many pitfalls.
