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CEX activity monitoring
As we noted when discussing the challenges of using Crypto Twitter as a source of investment opportunities, tokens are sometimes bought or sold by “whales” in large quantities before a Twitter and media campaign is launched to cause a pump or dump. Also, leading traders can execute large buys based on technical analysis and correctly predict a price rally.
It’s also common for massive buys or sells to follow an influencer tweet, though this is more relevant for small assets, the prices of which can be moved by a limited number of transactions.
Either way, a large buy can indicate the possibility of a price rise, while a large sell often precedes a dump. The bot will report such anomalous buys and sells on CEXes (centralized exchanges), starting with the top largest ones by trading volume. The bot will also report how much the price changed after each large transaction.
Users need to treat this information with a lot of caution. A big token purchase or sale is never a buy or sell signal by itself; it has to be matched against other types of data, such as Twitter announcements (e.g. a new partnership, airdrop, token unlock, etc.). Some of this data can be obtained using the bot, but for others users will need to do their own research.
As for the choice of CEX platforms, we will gradually add more of them to cover both the biggest (Binance, ByBit, KuCoin etc.) and those where so-called microcap “gems” are traded, such as Gate.io and MEXC. On the one hand, a microcap’s price is more easily moved by large individual transactions; on the other hand, orchestrated rallies or dumps normally occur on very small assets.
Therefore, knowing about anomalously large transactions with smaller cryptocurrencies can be more useful to crypto users, though tracking them puts more load on the bot.