The Anatomy of Tokens that Go Up
With the market cooling off, I feel like it’s a worthwhile exercise to share some of my own learnings using data & examples regarding tokens that go up. We start our exercise with tokens where our database of chainEDGE traders made $1.5mm or more of combined P&L on a token (which I’m using as a proxy for the most profitable coins in the last 6 months).
There were 18 EVM tokens (excluding SOL) where we registered $1.5mm or more of non-sniper smart PnL:
We can use this cohort as a case study of tokens where there was outsized profit potential, and can apply our learnings to our future onchain adventures. The biggest high level takeaways (sear these into your brain)
1. 16 of the top 18 were new launches
2. All new tokens with high profit potential were fair (or bundled) launches
3. Most new launches had moments where you could buy at $5mm or less (sub $1mm in a lot of cases) and all of them below $10mm
Now obviously, this is a (somewhat) limited snapshot, and only looks at the last 6 months. But it helps reinforce some key concepts that we all lose sight of. One of the most important is making sure there are people left to buy your bags! This is crypto, all coins are meme coins. I, and many others, have aped coins either via LBP or tokens with a seed round. While I’m sure some of these coins had seed rounds, each was liquid and available to buy at a normal $5-10mm or less market cap in most cases.
Outside of being mostly “fair launches”, the best tokens were first movers and/or in the right narrative at the time (AI, BRC, DePin, Base Memes, SocialFi). Its extremely important to know what the flavor of the month is (you can find this quite easily by just watching and journaling daily volumes/price performance or by reading thedailyedge.com).
On volume, its notable that in ~80% of these instances, the lowest daily volume for most of these tokens before their initial “burst” higher was $500k - $5mm. Anything less is likely a sign that the token does not have enough attention on it (even at a potential bottom) to pump much higher. Additionally, in nearly every instance, tokens peaked or were within days of peaking when volume surged to an ATH and never failed to reclaim it. This analysis obviously focuses on the EVM side, but I will be putting together another one for SOL (once I have a little bit more trader data).
Another way to flip this entire exercise on its head (and something I’ve been trying to do with my trading in general) is trying to trade volume, not price. Or trying to trade attention, not fundamentals. In the majority of the new launches, the token volume surged 3-10x from its low to its peak (and the price moved much more). Outside of outright gambling, having some sort of view of why you think volume/attention on your bags should go much higher is a great way to have a thesis, vs. actual fundamentals.
But anyway, the TLDR checklist that I think is useful for aping “conviction” new launches is:
1. Am I somebody else’s exit liquidity?
2. Am I entering at a cheap price and at low relative volume
3. Why do I think daily volume for this token can 10x
4. Is the token a first mover, in the right narrative, or both?
5. Do I have social proof of my bags (smart followers / mutual follows)
6. Is there any other “special sauce” to this bag, including a known/respected dev, signs that its not a copy pasta, etc
One of my better recent trades followed this process on YAI. Coming to chainEDGE soon, I built a “Smart Follows” tool that tracks follows from accounts that were early to multiple of these high PnL tokens. And then streams what they have followed in the past 1/2/7/30 days. YAI was a kind of lucky example where I noticed smart follows coming in, flagged it in the chainEDGE discord. Then when they announced their launch date, I stayed glued to my various onchain alerts until I saw the launch. I was able to enter at a $470k market cap (and it went on to run to $60mm, though I sold too early). And it hit multiple checklist items for me because I was early, it was a unique AI project, it had smart followers, and the dev was known/respected. Now to be fair, I never thought it would run as high as it did, but still worth sharing.
Gauging Interest for OCW’s Degen Bootcamp
I’ve been receiving a mountain of DMs and questions regarding shitcoining given the amount of new participants we’ve seen enter the market. This is a great time to sit back and spend time preparing for whenever degen activity picks up. If there is enough interest, I’d love to take a small group of hungry newcomers through a 6-week bootcamp where they can ask a ton of questions, consume lectures on everything I personally do daily to trade in this space, which tools I think are the best and be a part of a community of “new degens”. If interested, fill out this form and I’ll be in touch with potential next steps once we have a good group size. Once we ship chainEDGE sniper tools and analytics, I’ll do a separate bootcamp for that.
Disclaimer: This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. The author may also have positions in the tokens mentioned in the content, so please do your own research.
