"Quiet day today." A staple of shitcoin small talk.
What does this mean? Have you ever wanted to quantify a quiet day? Fear ye not. Consider this instalment a “breather” – it won’t be nearly as technical/dense as previous articles, but I assure you it’s equally important.
Shitcoin “macro” is as essential a backdrop to your coin trading endeavours as the copious discarded coffee cups and/or cans of Red Bull. Given how fast this market changes, it’s advantageous to incorporate a quick analysis of broader sentiment/volume into your daily routine. Without it, you’re essentially flying blind and missing out on key strategy determinants. Let’s discuss how to garner such data, past volumes, trends, and how you can incorporate all of this into your trading.
In a nutshell, this dashboard collates data on DEX volumes across daily, weekly, and monthly timeframes, making it useful for trend and sentiment analysis. Let’s have a look at some of our daily due diligence as per the below picture.
Firstly, see where I’ve circled “Run” and the widget timestamp currently reading 17min. Dune widgets use SQL queries to pull data, meaning they need to be run/called manually ie. they don’t display live data. Since this dashboard is popular, it’s typically updated relatively quickly, but always ensure you check the timestamp. To run queries, you’ll need to create an account to get Dune credits (2,500/month for the free plan is sufficient if you’re a casual user).
1. DEX 24 hours volume
This widget displays the overall 24-hour volume across DEXes. Typically, this figure hits around $1B, with anything greater than $2B signifying comparatively high volume. For reference, between March-May ’23 (the mini-bull that facilitated $PEPE), daily volume averaged between $2-3B, with a peak of $6B. This shouldn’t be your primary metric, however…
2. Ranked DEX by volume
To supplant the aggregate volume metric, it’s important that you analyse this section which delineates between DEXes. If overall volume is inflated by a DEX other than Uniswap, the above metric may not be applicable to shitcoin trading. This is evident in today’s volume (pictured below), with Curve’s volume almost 2x Uniswap’s in the last 24 hours. This also happened on 5 August when Curve clocked in at $1.4B vs Uniswap’s $400M.
For shitcoins, pay particular attention to Uniswap (which will frequently be ranked #1) and SushiSwap, upon which the vast majority of ETH mainnet tokens are traded. PancakeSwap, which is used primarily for BNB Smart Chain, and Curve, used mostly for stablecoins, also tend to comprise a large portion of volume but aren’t directly relevant to mainnet trading. This information is shown in the Daily DEX volume bar chart below, which I’ve designated “5” – use this to assess volume against past days and you’ll quickly gain an idea of the level of associated activity.
Note that the Market share donut chart on the right-hand side displays this information for 7-day rather than 24-hour volume.
3. Ethereum share of DEX volume
If you’re primarily trading tokens on Ethereum and its L2s, the market share of ETH is symptomatic of how much “revolving door liquidity” is available.
4. Market share - weekly DEX volume by chain
Mainnet is the superior chain, but don’t allow tunnel vision to obscure opportunities elsewhere. Arbitrum, BNB and Polygon are examples – look at this chart to assess and follow the volume. Much to my personal chagrin, you’ll notice that Base is absent. More on this next!
You should spend time familiarising yourself with Dune and always browse it when searching for data. Examples of other interesting use cases include:
If you’re looking for volume data on Base or another chain that’s not displayed on the Dune dashboard, bring it back to basics. We all know DexScreener for its token charts and filthy degenerate 1s trading view, but don’t forget that it also aggregates DEX volume! Use the sidebar to access chain-specific token listings, trends and 24-hour metrics. Furthermore, you can sort by specific exchanges to ascertain growth potential for new launches – useful for chains like Base which seem to lack consensus on a preferred DEX.
Volume is undoubtedly important. It’s the basis of market liquidity and is required to shift market caps.
High volume days typically feature myriad coin launches and present the best opportunities for sniping and scalping. On such days, I tend to increase my risk tolerance, “spray and pray” on multiple projects and commit painstakingly long hours to monitoring new pairs, sleuthing upcoming launches, and analysing volume. Spells of high volume also spawn my alter ego, Jasmine the Jeet, who prefers short term plays with the knowledge that it’s pump and dump territory – note that “volume” includes sales, and extensive high valuations aren’t sustainable. All is not rosy and musical on such days - honeypots and rugs abound. This makes sense because scammers are rats, and rats follow the breadcrumbs.
On the contrary, low volume days require you to be more selective with your plays. They feature fewer instant moons, retraces on larger coins and graveyard runs for multitudes of underwhelming low to mid caps. Thus, use these days to accumulate those coins you’ve been watching all week and adopt a value investor’s approach. Scratch that, “investor” is a word that should never be used in the context of shitcoins, akin to a heretic on the church grounds. You get the idea, though. Ape everything mode=off.
Additionally, in my experience, absolute volume pales in relevance when compared to sentiment. The first $2B volume day in a bullish phase is much more euphoric than the last $2B volume day in a waning phase. Not all days are made equal! Growth phase > contraction phase. You can also predict when volume will spike – positive macroeconomic indicators, launches of chains/L2s (eg. Base) and token mooners/behemoths that spill into the normie news cycle all contribute to verdant shitcoin pastures. Adjust your liquidity accordingly!
Finally, pay attention to the fact that we’re currently operating in a stagnant market. Compared to previous years, we appear to have reached a semblance of market efficiency which doesn’t promise the same unbridled gains (see below). Isn’t it surprising, however, that everybody described the past few months as “PEPE summer” and “shitcoin season,” despite relatively unimpressive volume? You’ve also seen the pnl screenshots; generational wealth has been made. I maintain that shitcoin trading continues to offer lucrative opportunities, but success is rooted in staying ahead of the curve and grinding those long hours. NFTs in 2021-22 was easy mode, it’s time to level up. You can do that by checking out my other shitcoin articles:
I strongly suggest incorporating volume analysis into your daily routine in order that you can develop your own set of observations and strategy adjustments. Think of it as part of your daily homework, and think of me as the ogress teacher screeching at the insolent children who forget to complete it.
If you found this helpful please connect with me on Twitter or X, or whatever the kids are calling it these days @jasm_eth.
As always, my inbox is open for chats and insight sharing!