Before buying NFTs, analysing the statistics of the collection is almost as important as the fundamentals. Once I am certain the fundamentals of a project is good, I utilise data and charts from free websites to ultimately decide whether I should invest. Looking at the data from these websites can reinforce my conviction in a project, making me buy more than one or change my decision completely and not buy any at all.
It is important to understand that the values and metrics that we go through will vary depending on whether the project has revealed or not (when projects mint, you do not know what you have until they reveal, which happens after a few days).
Keep in mind this is just my opinion and is not financial advice — DYOR
3 key websites
There are 3 websites we will be diving into, with each one providing unique insight into whether the project is suitable for purchase (from a statistical perspective). Strong fundamentals and good statistical metrics generally suggests a good buy.
I will be using the Psychedelics Anonymous Genesis (PA) collection as an example throughout the article to determine whether it could be a good buying opportunity. Current floor value is 1.35ETH
Flips is used primarily to view 2 metrics:
- % Supply listed for sale
- De-listings chart
The ‘% supply listed for sale’ is the percentage of the total supply that is listed on the secondary market like OpenSea. A lower supply listed suggests that holders have more conviction in the project and are thus not listing it for sale.
- Projects with a single-digit percentage of supply listed is a very bullish sign. I usually like to see no more than 17% listed
- With PA having a single digit percentage of supply listed (shown above), I find this bullish
Furthermore, by going to ‘Number Listed’ you can also view a chart of how many NFTs are listed from a certain collection. This is shown below
- Unlike most charts, you want to see a downward trend as it indicates less of the total supply is listed
- PA shows an overall decrease in the number of listed items, which is a positive sign
NFTGO is primarily used to analyse:
- Holding amount distribution
- Holding period distribution
‘Holding amount distribution’ is the number of items each person is holding from the collection. For example in PA (image above), around 78% of the total holders are holding one piece and about 17% are holding 2–3 items.
- Distribution numbers over 90% for holding 1–3 items is very good. Thus, PA having a distribution percentage of almost 96% is a very good sign
‘Holding period distribution’ shows how long individuals have held onto an NFT collection. Depending on how old a project is, a higher percentage for the longest period is optimal.
- Once again you want to see numbers of 90% for the last two periods — in the case above, a percentage of 94% for the 7D–3M period is a good sign
- A high percentage in the 24H and 1–7D periods suggests there are a lot of individuals flipping the project for profit. This usually occurs during the early stages of the mint
Compass has a visual representation of where each item of an NFT collection is listed. It is mostly useful for shorter time-frame NFT trades.
By heading to the ‘Listings’ tab, you are able to see how many items there are listed at each price point which will allow you to visualise how thin/thick the floor is. The floor is the lowest price an NFT is selling for from a collection
- Recall that PA has a floor of 1.35ETH, and the image above shows that its floor is quite thin as there are very few listings in the 1.3–1.6ETH range
- With a thin floor, it is possible with any positive announcement that the floor will increase very quickly, until it meets some resistance at 2 ETH (with over 30+listings), which is a very common psychological resistance point.
PA is a collection that has very strong statistical metrics. Combined with a good set of fundamentals (engaging community, great transparency, fantastic roadmap, originality), I believe PA could be a great investment.
However, this is just my opinion and is not financial advice. And to be completely transparent I have been holding one PA item since mint.
Update: The PA floor is 1.85 now, up 37%
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Disclaimer: This article is simply my opinion and is not financial advice. Always DYOR!
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