Consensus: Questions & Answers!

Profile picture
May 12, 2020

Santiment's founder, Maksim Balashevich, had a great Consensus discussion today, and we received many great questions about our platform and the current state of the crypto markets.

The video of the call can be watched in full here:

Questions and our answers can be found below!


Q1: So exchange wallet inflows lead to price spikes? How can we set up this alert so we can trade? Would you say this applies only to small, less liquid tokens?

A1: Historically, notably high wallet inflows do more often than not precede price spikes. They are a great indication of a specific asset picking up in action. In order to set an alert for any wallet metric, such as exchange inflow, simply go to your user avatar on the top right of Sanbase, go to My Signals, and enter in the appropriate metric, what asset it will track, the threshold qualifiers, and how you'd like to be notified!


Q2: Which are the (most) important (types of) metrics to follow now in Bitcoin?

A2: On-chain metrics tend to be relied upon most consistently by our community, and in the future we are moving towards derivatives market data. This will also be very groundbreaking for crypto fundamental analysis. We would recommend checking out our BTC Entry Points template here.


Q3: What is the role of emotion in the crypto markets? How much is it dominated by bots and technical indicators?

A3: Great question here. In general, cryptocurrency trading has always been notoriously known for having a large amount of FOMO and FUD, and this is largely due to the fact that markets are just so volatile and unpredictable compared to other asset classes. Particularly on the short and mid-term timeframes. It also has a reputation for being heavily used by younger, often more inexperienced traders in investing. Though the demographics can never be proven definitively and exactly due to the natural anonymity of cryptocurrency, these speculations very likely have truth to them. Because of these factors, emotion can play a heavy hand in the direction of crypto markets. And the human tendency to buy high and sell low is very often exemplified by crypto traders and proven in our metrics.

This is why we generally have (successfully) recommended to buy when sentiment is low or non-existent, and sell when euphoria takes over. Time and time again, this is how cycles have gone in cryptocurrency. You can track social volume for Bitcoin and others here. Technical indicators and bots are important to factor in, as they capitalize on psychological support levels that have been previously created through trader behavior. However, these generally work best with shorter term time scales (eg. prices will bounce if they reach x price). The overall health of the network, and indications of whether markets are overbought/oversold can best be studied through actual fundamental analysis rather than TA. Both are useful in their own respects though.


Q4: How would you interpret Token velocity on BTC VS ETH?

A4: Bitcoin and Ethereum's velocity is calculated by dividing the 90 day estimated USD transaction volume by the 90 day average USD market cap. (This is the equivalent to the $BTC circulated divided by the Bitcoin money supply.) You can take a look at how token velocities of assets are looking over time here. And we actually have a 'Token Velocity vs. Price Divergence' model available to PRO subscribers on Sansheets, which we can link to by request. Currently, the status of both assets look to be in neutral territory.


Q5: Why does Santiment have a token?

A5: SAN is a utility token that currently provides access or discounts to exclusive parts of the Santiment platform like SANbase, their flagship product. The long-term roadmap is for SAN to power a decentralized curation market for crypto intelligence, where anyone can leverage and tokenize their market know-how. Our Santiment Academy page dives into more about our token here.


Q6: What does Santiment say about the markets coming up to the halvening? Did it predict the dump?

A6: We released several key articles leading up to the halving event including the first article providing an assessment about how prices would fluctuate leading up to the final week before the halvening, and where prices will likely head afterward.

Among our notable theories were the fact that the price would likely do what the crowd was least expecting (which is very often how markets end up playing out). With most of the crypto world expecting the halvening to be a bullish event, we saw a 15% sudden drop just two days before the event took place. When the crowd expected to see either a major bounce right back to where prices were, or alternatively a further retracement down to the $7,000's as the halving actually took place yesterday, neither scenario actually came to fruition (again, faking out many). More on what our insights and predictions were can be read about in these articles:


Q7: Who is Santiment built for? Can't anyone access this data without a third party app?

A7: Santiment's primary audience are those who want to understand the market behavior through relevant metrics. For several years, there was a presumption that fundamental data was meaningless, if not completely non-existent. However, we realized that due to there being no P/E ratios or quarterly reports by crypto projects the way we see in traditional stocks, that there are other ways to identify accurate valuations for assets like these. And after years of studying, building, and tweaking, we have come up with dozens of excellent on-chain and social metrics that are of serious use to those who want to maximize profits and take their trading and investing in crypto to the next level.

And no, data isn't available in one place anywhere on the market. It is true that blockchains are open to the public. But building the proper Big Data pipelines that can provide all of these metrics is a monumental task that we decided to take on in order to make it more accessible for crypto traders. Plus, to really see what is happening in crypto markets, pricing (including derivates), on-chain, social, and dev. activity metrics all need to be aggregated. If one is left out of the equation, the overall view is drastically diminished in quality.

Though some on-chain data that Santiment collects is publically available, much of the data is very difficult to curate. And more importantly, we are THE behavior analytics platform. There are no other providers for our social metrics. Also, metrics like our development activity tracking, particularly, was a big pioneering achievement for Santiment because organizing and quantifying Github activity by every single notable cryptocurrency project is something that had never been achieved before (and still has not been duplicated by a competitor).


We are more than happy to answer further questions about our platform, and you can message us on Intercom by clicking on the button at the bottom right of your screen while reading this article. Or you can also join us on Discord and talk to members of our staff and our community (known as our SanFam) any time!

To make a free or paid account on Santiment, simply head to our landing page and go through the quick and simple sign-up process!

Profile picture
May 12, 2020

Thanks for reading!

If you enjoyed this insight please leave a like, join discussion in the comments and share it with your friends!


Assets from this insight

Bitcoin logo


$ 13624.84

5.66%in last 7d
Ethereum logo


$ 390.46

5.11%in last 7d

Conversations (0)