The world’s best analytics platform for all things NFT: Spotting NFT alpha by ranking, rarity, whales tracking, drops and more!
Deciding to get exposure to NFTs comes with the risk of volatility and pumps and dumps in the market. There are consequences in letting a dramatic decline in prices impact your decision-making process. This imposes the possibility of negative returns on investment.
In the light of this, NFTGO covers ways to transform the volatile nature of NFTs to your advantage with the assistance of NFTGO’s powerful features.
Data highlights the truth
During uncertain times, there are a variety of opinions in the space. From those who panic and sell immediately and then regret it to critics who think it’s the burst of a bubble, no statement should be relied on without clear and coherent data supporting it. NFTGO data aggregation methods help you find the patterns others don’t see amid wide price fluctuations
How safe is investing in NFTs?
With the NFTs repeatedly breaking records in financial markets, the demand for the market has gone so high that the market cap is now over $8B.
Even though prices for NFTs have appreciated over the past year, the market’s sharp rises and falls make investors think twice about the genuine value of NFTs.
The market’s volatility is an inevitable pattern, the instant drops in price can sometimes remain as long as days. Because of the volatility, making accurate predictions is difficult. NFTGO provides the market trends in the analytics section. You can find the latest data here.
Inspecting the time series of NFT market cap data in different 24-hour cycles and 30 days for short-term and long-term trends helps us identify the market directions.
NFTGO is the data treasury layer on top of blockchains, we retrieve all the data from the blockchain and make it accessible to investors. By leveraging NFTGO’s technology, users can view the 24-hour trend in the market cap on different days. You can view the trends for different days by using the calendar in the top right corner. This is the data for December 7th and you can see that during the past 24 hours a sudden decrease in market cap happened in just a matter of an hour between 16:30 to 17:30 PM.
This price decrease can have many reasons from Whales trading to news from outside of the NFT ecosystem. We are more interested in finding patterns in the market and examining how these patterns influence the long-term value of NFTs.
The data from December 6th shows a sudden increase in Market Cap followed by an almost 35% drop in market cap, after this, the market began to follow a more steady pace. If we compare these two diagrams together, we can see that the volatile instants are followed by longer and steadier trends.
Analyzing the trading activity in the market during that period, we can spot the trends that emerge alongside each other and get a better understanding of how volatility occurs.
You can see that the sudden upsurge of the market cap at 11:30 AM was followed by trading activities occurring at around 9:30 AM. A detailed graph can show us a more evident pattern and shine a light on the most critical data points.
You can reduce the size of your viewport by adjusting the selector. This is an excellent tool for focusing on the data points that are important for your analysis.
Advanced functions: Market liquidity
NFT liquidity is an important metric. But it requires comprehensive analysis and access to reliable data. NFTGO tackles these challenges and provides an advanced tool for measuring NFT liquidity.
We provide insights from the transparent and open blockchain ecosystem. Even though the vast amount of data blockchains store is overwhelmingly large due to the nature of the decentralized ledger, NFTGO’s technology makes it possible to use advanced functions such as NFT liquidity by directly accessing blockchain data.
NFT liquidity is a measure of the trading activity in the market. We can measure the liquidity in each category of NFT projects. By doing this, investors can discover the most agile markets in the NFT space. You can see that Social NFTs (ie. ENS) and Avatar NFTs (ie. CryptoPunks) Are the most liquid NFT categories in the market.
An NFT’s liquidity is a reflection of its intrinsic value. This is important for both long-term and short-term investing strategies:
The case for short-term strategies
At its core, short-term strategies require a high trading volume. In this strategy, the investment does not last for more than a couple of days. Therefore, liquid markets are critical for a successful investing strategy. Looking back at the bar chart, this might mean that short-term investing strategies are more focused on Avatars and Social NFTs.
Liquidity is what distinguishes a music track NFT and an NFT avatar both being sold at $10K. If the investor wants to quickly sell the NFT within two days, although both NFTs have the same price, the higher demand (and liquidity) for the avatar makes it more appealing to the buyers, and therefore, it sells faster than the music track.
This is what it means by saying that liquidity indicates an NFT’s intrinsic value.
The case for long-term strategies
Going back to the concept of intrinsic value, let’s look at liquidity from the lens of a long-term strategist. This is vital for their investment because of the relationship between liquidity and the buying and selling price. This means that if the investor wants to sell their NFT, they don’t have to give up unrealized gains to sell the NFT. In liquid markets, both the seller and the buyer are relatively on the same page about the price, and the seller does not have to suffer from loss. In other words, the assets’ value is understood both by the seller and the buyer because of the liquidity in the market.
We can say that the price gap is negatively correlated with liquidity. For an illiquid NFT collection, the gap between the auction price and the bid price is more likely to be bigger.
Advanced functions: Rarity estimation
With NFTGO’s rarity estimation function you can find the most valuable NFTs in the market. Not all NFTs are equal and some of them have significantly higher values because of their rarity. The market for rare NFTs is always hot and every day there’s a new auction set for thousands of dollars. The supply for Rare NFTs by definition is much more limited and scarce, but the demand is high. Every collector wants to have the rarest NFTs and they are willing to pay high prices for that. This makes our rarity feature invaluable to investors.
But defining rarity is a challenging thing and without tools, we can only guess how rare an NFT is. NFTGO’s rarity estimation tool employs a scientific method called Jaccard distance to make robust rarity estimations. For a full description of the mathematical model, you can read this article.
In this way, you can easily find the rarest NFTs and secure your funds by buying an NFT with high demand. NFTGO provides a user-friendly way for viewing the NFT rarity for every listed collection. You can go to the rarity section for the collection you want to find the rarity scores for the NFTs. As an example, you can look at the rarity of Bored Apes here.
Here, you can see the rarity distribution of the collection in the horizontal bar chart. You can see that out of a total of 10,000 NFTs, only 209 of them are considered very rare. This is only 2% of Apes. Investors can use this rarity distribution tool to examine how scarce a rare item in the collection is and evaluate NFTs better. If we compare this project to CryptoPunks, you can see only 0.8% of Punks are in the legendary category (which is the highest rarity score). This would make a Punk with a rarity score of 95 more scarce relative to another an Ape with the same rarity score.
Alongside the bar chart, we also provide a powerful search engine with flexible filtering tools for you to find the NFT with the rarity and price that you want. You can change the search parameters and find the most suitable NFT.
The rarity function comes with a more detailed view of each NFT, using this, you can see how each attribute contributed to the NFT’s rarity score. There are a lot of fine details in this feature, if you want a deeper dive, you can go here(# Link to article NFTGO’s rarity explorer)
Advanced functions: Whale tracking
In chaotic times, what are seasoned investors doing?
A 5% drop in the NFT market might not mean more than a couple of hundred dollars to small investors, but for people with over a million-dollar portfolio, this is a matter of thousands of dollars. Why can Whales succeed in this volatile market? We can use Whale Tracking to find out. NFTGO monitors the activity of 745 Whales. Every move that a whale makes is recorded on NFTGO. By using Whale Tracking, you can find the best strategies in every market cycle.
In the first section of Whale Tracking, we provide an overview of what Whales are paying attention to. You can explore all the Whale activities in more detail in the second section.
Here, we have a detailed list of all the activities whales have done in the past 24 Hours. You can click on any address and view their portfolio to understand their strategy better. If you’re interested to learn more about this feature, check out this article!
Advanced functions: NFT Drops
With more people jumping on the bandwagon, NFT drops have become increasingly common and are now something you see every day. See new drops by scrolling down on the main page until you see the NFT Drop section.
Each piece of drop information includes essential details like date, and the minting price of the NFT.
On NFTGO’s NFT Drop page, users will find a brief description of each newly or soon-to-be dropped NFT. A tag is also displayed below the name of the project to give users a clearer understanding of the category it belongs to.
Click on the ‘View All’ button and a description will be shown to help users better understand what the NFT is about.
The gateway to minting an NFT is at the bottom right corner of each NFT column section to allow for a quick redirection to the minting website. The project’s website, Twitter, and Discord community are only one click away at the bottom left corner of each section.
If you have a new project dropping soon, you may submit it for review by clicking the ‘Submit’ button (or this link) at the top right corner. The NFTGO team will attend to your request as soon as possible.
Advanced functions: Ranking
In this article, we went over the theory of making profitable investments, but Investing is more art than science.
NFTGO provides a multi-dimensional ranking of NFT-related indicators for users and investors. NFTGO also provides latest rankings of assets, collections, holders and whales based on its aggregated data.
Overview ranking based on total value and its increase of total market cap, collection growth, asset value, liquidity, the number of holders, holding value of whales, etc.
The long horizon is visible
Trying to handle the risk and uncertainty that comes with volatile markets is a challenging aspect of investing and it can be hard for most people to stand up to their emotions where there isn’t much data emphasizing on the possibility of a brighter future. Warren Buffet once said:
“You will continue to suffer if you have an emotional reaction to everything that is said to you. True power is sitting back and observing things with magic.”
Although this advice makes sense with the benefit of hindsight, the temptation to pull out of the market and sell everything can’t be resisted just by willpower. That’s why we need data to tell us the true story of how the future will turn out. Markets go through cycles but the assets with high intrinsic value will be the most profitable even though they are not immune to pumps and dumps in the market.
- NFT liquidity is one of the most helpful functions that can help all investors in uncertain and volatile times to secure their funds while continuing their investment strategy.
- Spotting the rare NFTs provides a less risky way for investors to participate in the NFT market due to its higher demand.
- Using Whale Tracking, you can model the strategies of seasoned investors and make more informed decisions.
You can use all the tools mentioned in the article at NFTGO’s website.