Can knowing how profitable the holders of a crypto asset are help you decide whether to invest? IntoTheBlock, our AI-powered crypto insights partner, says “yes.” As shared in our post last week, IntoTheBlock’s Token Summary in The Crypto App’s Pro and Pro+ shows an indicator called Holders Making Money at Current Price for various crypto-assets.
What Is The Holders Making Money at Current Price Metric
This metric summarizes the Global In/Out of the Money (GIOM) classification, which provides a way to categorize addresses based on their profitability. By using this metric, traders can better understand buying and selling pressure at different price ranges, helping them make informed decisions about their trades.
So, what exactly does the Holders Making Money at Current Price metric show? Put simply, it summarizes the percentage of addresses holding a crypto-asset based on whether they are profiting (in the money), breaking even (at the money), or losing money (out of the money) on their positions at the current price.
How Can I Use This Metric?
So how can traders use this information to their advantage? One way is by looking at the percentage of addresses making/losing money on their positions and extrapolating what that means as far as trader psychology at those levels. For example, if most addresses are out of the money, the price will have high selling pressure since many of these addresses will look to sell once the market price reaches their average cost and break-even on their positions. Resistance levels may deter a continued price increase as long as that percentage is heavily in the red.
On the other hand, a heavy percentage of holders who are profitable indicate that trading levels where a high amount of addresses (or volume of tokens) had previously been bought have been exceeded and that those addresses would currently realize a profit if they sold today. In this example, more addresses in the money are likely to be positive for the network as there is less selling pressure from holders trying to break-even on their positions.
In conclusion, the Holders Making Money at Current Price metric provides a useful tool for crypto traders to better understand buying and selling pressure at different price ranges. By taking advantage of this metric available in The Crypto App’s Pro and Pro+ services, you can make more informed decisions about when to buy and sell, potentially leading to more profitable trades. Try it for yourself today by taking advantage of a free 7-day trial.
