Introduction
A core feature of blockchains is immutability, which in this context means that every single transaction is stored on a blockchain and is forever freely auditable. Since a blockchain is a public database shared across multiple nodes, the record of transactions is visible to anyone in the world.
Investors can use this on-chain data to gain an edge over other market participants by using information asymmetry to make better and more consistent trades. Often referred to as ‘Alpha’, this secret information helps specific traders outperform others. One of the critical areas where alpha divides investors is NFT trading and coin.
NFT stands for Non-Fungible Token, and an NFT is a cryptographic asset that possesses a unique identification code. If something is convertible, it means that it can be exchanged; A dollar is convertible because it can be exchanged for another dollar. An NFT is distinctive, and it is impossible for one NFT to be equal to another. However, ownership of NFTs is transferable, making it possible to trade and sell NFTs on the open market. For more in-depth information on NFTs, check out this guide: Nansen’s Guide to NFTs.
The popularity of NFTs continues to increase, which is partly speculative, but mainly driven by real use cases that include connecting creators and consumers directly without intermediaries and most recently, due to asset tokenization – for example, tokenized Real Estate.
This article explores how traders can use on-chain data and analytics from Nansen as a tool to outperform and outperform other investors. Nansen features multiple dashboards of NFT collection analysis and NFT data analysis, and this on-chain data, or alpha, helps investors stay ahead when trading NFTs.
Read more about the best NFT analysis tools here.
Follow Smart Money
Analyzing more than 130 million Ethereum addresses, Nansen formulated a list of wallets that have made consistent gains in the NFT sphere in a variety of ways, earning them the nickname “Smart Money”.
Found under the NFT Paradise tab, the leaderboard consists of the best NFT traders in the chain. This dashboard is perfect for finding models or mentors for NFT trading to copy trade. Simply select a profitable wallet and copy the transactions made by that account. Copy trading is a brilliant strategy and can be used by anyone regardless of experience level.
The Smart Money Tracker is a live data feed that shows the real-time transactions of the most profitable wallet addresses. Investors can see which collections are hitting smart money, which collections are selling smart money, and use this data to supplement their own NFT trading strategy.
Do you want to follow the Smart Money? Sign up for a Nansen account today!
Stay up to date with the latest market activity
The Market Overview NFT Data Analytics Dashboard provides an overview of the NFT collections and the fluctuations in their floor price. This allows investors to track trends within the NFT sphere and gauge general sentiment. By filtering through the change in floor price, investors can find NFT collections that are rising in prominence and coin or buy them. This dashboard facilitates trend trading, where investors use Nansen’s collection analysis to trade with momentum.
Find new coins
This dashboard provides investors with a great simplified breakdown of the NFT space. This tab shows investors the latest volume of NFT coins, the most recent projects making Smart Minters, and a ranking of the most profitable wallets.
This is true alpha; instead of wading through Discord groups and Twitter, investors see the entire space and the trends developing within it from a single source. Investors get access to the latest coins, and when trading NFTs, timing is extremely important.
Investors can track price trends, volume and the top NFT flippers from a single dashboard. With the proliferation of NFTs, it has found profitable projects early on, so investors need a blockchain analytics platform to ensure they stay ahead of the market.
Follow specific collections
Once investors have selected an NFT collection, the next dashboard is Nansen’s NFT God Mode. It is the specialized analysis tool if the other dashboards are considered general. Providing in-depth collection analysis, including a basic overview of trading volume, transactions and buyers, holders, trades, listing, related collections, how much smart money holds, selling platform and the addresses that buy.
This dashboard provides investors with a true insight into the current trends of specific NFT collections. Visualizing price trends and volume enables investors to determine ideal sales conditions, and tracking smart wallet addresses provides insight into whether the project is best to hold or flip.
Check Rarity
Nansen’s algorithms use statistical uniqueness analysis to calculate NFT rarity. The rarer the features associated with an NFT, such as diamond teeth on Bored Apes, the higher the value of the artwork. Most projects have an extreme curve, with the rarest combinations having significantly higher values.
Nansen’s Rarity Profiler allows investors to search for specific characteristics, see the wallets that contain those NFTs, and calculate a rarity score for each NFT. This is ideal for NFT traders who want to acquire highly specific members of a larger collection.
Closure
Nansen is the one-stop shop for NFT alpha, distilling vast amounts of data and presenting it in a digestible format. It is without a doubt an essential tool for every NFT trader who wants to outperform their peers. Nansen not only tracks the most profitable wallet addresses and facilitates copy trading, but it also gives investors the chance to look for developing trends in the market and capitalize on them. Information is the tool that separates profitable NFT traders from those who make losses. Nansen’s analyzes show the broader market trends that cut through the masses of unnecessary information and deliver specialized data to help the investor find the best NFT from any given collection. Nansen provides the data advantage investors need to outperform other market participants.
Sign up for a Nansen account today!
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
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