Thread by @TraderAero

The Power of Google Trends: NFT Analysis🧵

Today I'd like to share a tool that I use ~weekly as a full-time trader

Google Trends is a powerful tool that can help identify strong buys/sells for the short, mid, and long term in the NFT space

Let me break down how👇

1/18

To be clear, Google Trends (GT) is not a key indicator that I use in all trades, but rather one of several variables that I *sometimes* use in my trades

Overall, it's just a great tool to add to your own trading arsenal to gain insight backed by data

Okay, let's begin👍

2/18

In the short ~1 year history of NFT trading, I've found GT best helps traders to identify strong SELLING opportunities (vs. buying)

Why? Because selling is always easier than buying when it comes to hype (which is what has driven the NFT space recently)

More on that later

3/18

Let's first talk about using GT as a tool to identify BUYS

For long-term entries, the lack of historical data for the NFT space makes analyzing nearly impossible

There's no promise of future hype and the key support for base interest is very low (looks like BTC in 2013)

4/18

Although interest in NFTs has moved up drastically, there simply enough data to use GT to support long-term buy entries

Because of the risk, you're probably like me and recognize that even 'long-term' NFT trades are truly mid-term (few mths-1yr)

So let's talk mid-term⬇️

5/18

Looking at NFT interest since 2021, recent interest has slowed significantly from the Jan. top & is quickly approaching a stabilized level (in black) set throughout 2021

To me, this shows the current mkt is no longer 'hyped' and mid-term accumulation's getting attractive

6/18

Here's a basic strat I use for using GT for mid-term buys -
Accumulate low-interest projects with:
🟢strong fundamentals
🟢stable price action (not hype-driven)

Compare to similar tier projects and enter ahead of the herd

An example👇(not biased at all here...dyor, nfa😶)

7/18

Now let's break down where I think GT excels:
Identifying sell signals (core of the 🧵)

Let's start with the long-term...

My own long-term strategy using GT for selling is simple
If interest for the NFT space ever reaches BTC's in 2017, I will sell 80%+ of my NFTs

8/18

This may sound obvious, but having this long-term strat in place helps to ignore inevitable noise in the future like:
- 'x' hitting 100 ETH soon
- Diamond hand 'w' no matter what

Selling hype is just greed management
My signal is set & therefore selling is simplified

9/18

Onto using GT to help with a mid-term swing strategy:
Throughout January 2021, 'NFT' interest surpassed 'crypto' and ran close to that of 'bitcoin'

This was the highest 'NFT' interest had ever surged relative to the other two terms, so I became very wary of a pending pop

10/18

I used GT at the time to help comb through the noise and slowly pull capital from extremely risky projects that were easy flips during the hysteria

We all know them:
🗑️The shameless derivatives
🗑️The random projects that pumped of nowhere
🗑️The copy-cat cash grabs

11/18

I obviously didn't know where the EXACT top was, but the GT data helped remind me to de-risk & take profit

Now, it's time for the bread and butter🍞
My go to short-term trading strat using GT during peak hype.
This helped me secure profits in the recent Jan/Feb NFT peak

12/18

The main strat is similar to using RSI for spot trading:
Following GT daily,
The first few (2-3) days of consecutive lower highs in interest could mark the START of a potential blow-off top

In black 1/21 is the peak interest. Peak price followed shortly after...

13/18

I'd typically expect a small multi-day window to sell your mooning projects, so get ready to TP🚨

This is where you'll see your blue chips up 15-30% per day, and absolute🗑️ up 100-200%+ per day

See example #MAYC chart below - 1/21 roughly marks beginning as mentioned

14/18

During peak hype, I use this strategy in my spot trading as well. It's a rare opp. to make 💰 off of people FOMOing in (exit liq)

Investor psychology applies in all markets, NFTs included.

Memorize the dot-com bubble chart as historical chart structures often repeat👀

15/18

So the 🔑 concept here is...
A short-term NFT top can *often* be identified if you see:
⬇️LOWERING GT interest (same as RSI in spot-trading)
⬆️INCREASING price (FOMO)

1/21 marked the peak in interest, and shortly after ~1/31, we saw price peak

Save this tweet⏰

16/18

This is how I use Google Trends to improve my trading success for the short, mid, & long term

It's free to use and easy to understand once you get the hang of it

Remember though, no single indicator ever paints the full picture and this is just a powerful tool to help🔨

17/18

Lastly, a quick tip for GT search terms:

Choosing which terms to use is very important, and using the most popular/searched for what you're trying to analyze is best

For example:
Use the term 'NFT' instead of 'nonfungible token' since it is searched more often

18/18

That wraps up the basics for how I use Google Trends. I hope you learned something from this thread!

Any engagement or follows are appreciated, and I'm always open to questions or feedback

More threads and ideas to come 💎
In the meantime, good luck trading 🤝