How to Profit from Cryptocurrency Volatility
How to Profit from Cryptocurrency Volatility
Following successful traders is an excellent way to improve your strategy. In this article, I'll share how one of our users made over $20,000 after noticing an anomaly.
An anomaly is an unusual deviation from the norm in financial data, which can indicate significant changes in a wallet after transactions. Spotting these anomalies can offer opportunities to capitalize on market movements.
How to Profit from Cryptocurrency Anomalies?
I followed the wallet of a well-known crypto community influencer, Khuong, who frequently shares insider information and successful trades. When I noticed his activity with the $CATE token, I decided to mimic his strategy.
I used a new product, Anomaly Detection, to track unusual wallet activity. You can find the guide here.
While analyzing the transactions, I discovered an anomaly on a wallet that spent large amounts on speeding up transactions (by paying higher gas fees). This allowed the trader to finalize exchanges faster and buy tokens at a lower price before they surged in value. After observing this strategy, I replicated his actions, leading to similar profits.
Here’s how I did it: Enter the wallet address and navigate to the "Anomaly Detection" section.
Select the type of anomaly you're interested in. In my case, it was “High Gas Spending for Transaction Acceleration.” This anomaly type focuses on expenses a wallet incurs to speed up transactions. If the gas costs for a particular transaction were too low or excessively high, it's flagged as an anomaly.
Adjust the time range using the date slider. In this graph, we can see an anomaly related to Max Priority Gas Costs. On September 10, 2024, at 03:21, there was a sudden spike in gas priority costs to 0.040727 (as seen by the blue line). This deviation was flagged as an anomaly by the system. The trader likely increased gas fees to expedite their transaction, which might have been necessary in a volatile market environment to secure the deal.