The AlphaFlow Chart is composed of three metrics and prices:
- Concentration Index
- Top Holders Share %
- Top Mover Token Share %
Definitions for these metrics can be found in their respective AlphaGuide chapters as well as in the GitBook. As for how to use it, here’s a demonstration of how to use these metrics with a case study on the $AAVE and $LDO tokens.
Case 1. CI rises abnormally at lows, whales get stronger: $AAVE
Let’s check out $AAVE. In March 2022, we can observe that the Concentration Index rose significantly, yet Top Holders did not change much. Thus we can deduce that the rise of the Concentration Index comes from the concentration within the Top Holders, rather than inflows outside the Top Holder group.
In other words, the power within the Top Holders became more concentrated, and there are Whales holding more positions. We can assume that the Whales within the Top Holder group have strong confidence in AAVE and are ready to make prices. And sure enough, the price of $AAVE did increase soon after.
(AAVE launched V3 on 3/14 this year, and the currency price has been rising all the way in the short term)
Case 2. CI plummeted, and the market began to change hands: $LDO
Here with $LDO, you can use the AlphaFlow Chart to observe several things. The first is with the CI slump around May, Top Movers continued to increase, which means that the whales within the Top Holders began to allocate positions to other Top Movers, and there were external funds that flowed into Top Holders, and the overall Top Mover is also at a relatively high point, indicating that many people intend to enter the market to buy the dip. But we can know that Top Holder itself is already changing hands according to the slump of CI (strong hand to weak hand), so a new wave of token price slump began. Afterwards, the recovery of CI can be regarded as a new change of hands. That is, there were other funds that were ready to continue to enter the market to receive orders during the price drop, but after persisting for a period of time, the CI plummeted again; so this wave of decline It goes on and on.