Alpha Feed Post

Look For Anomalies... Anomalies = Opportunity

Last week, I began tweeting about some rather anomalous behavior that I was noticing occur on TRB. Specifically, I was noticing prolonged periods of EXTREMELY negative funding. Additionally, we notice 24H volume levels exceeding that of most majors. This is what I mean by ‘anomalous behavior’.

Remember, metrics like funding, OI, and volume are rather useless when applied in isolation. When combined, we can make powerful observations. Upon further investigation, I began to notice similarities to previous coins exhibit similar anomalous price action over the last month. Most notably with YGG…

And then again with CYBER.

The twitter thread attached at the top of this post details my step by step commentary on the most recent price action related to TRB, and potential ways in which we might navigate such an event.

There are a few main lessons and takeaways when these types of price action events unfold.

Look for inorganic activity/anomalous price action for potential opportunities
Try to determine what is causing the inorganic/anomalous activity
The end game is ALWAYS known for these inorganic moves (what goes up must come down)

Now that we have an idea of one type of situation to look for, I wonder if there might be anything similar potentially setting up? As always, feel free to comment or ask questions and I will do my best to help!

Great insights - what was the best way to play this (including preferred exchange/trading platform to execute)?

depends entirely on someone's risk tolerance and preferred style of trading. that said, there are a few rules of thumb:

if you are playing the long side, you must give yourself room for 10-20% pullbacks. this should inform your sizing.

knowing that these always end with a nice dump, you can also wait for the short side. this is more tricky and requires more discipline and skill. this should also inform your sizing. shorting things like this require a near infinite leash on the capital/collateral you are using to fund the position.

my preferred venue is bybit, and i often trade through some 3rd party OEM like Insilico Terminal or Sandwich Trading.