Thread by @santimentfeed

1. Over the last 15 days, dozens of mid-cap coins went on a short, seemingly unexplained bull run.

So we decided to do some digging. Turns out - some of them share a (weird) common pattern.

(thread)

2. A few weeks ago, we at Santiment launched a tool called Top Social Gainers (app.santiment.net/trends).

It calculates top 10 words w/ the largest spike in mentions on crypto social media (relative to their past 2-week average) making them biggest *emerging stories* in crypto.

3. At first, the tool seemed great for picking up on developing stories.

For example, when someone kidnapped the wife of one of Norway‘s richest men & asked for $10m in Monero, our list looked like this:

4. Pretty cool right? We could see that the news was making waves in the crypto community, but also track exactly how it grew as more people and publications picked up on it.

But then - a few days later - something strange happened to our list of Top Social Gainers:

5. All of a sudden, our list was overrun by elevated mentions of various mid-cap coins, with barely a few major news items sprinkled in the between.

Once we checked the coins on SANbase (app.santiment.net), it was pretty clear why they got the crypto crowd talking:

6. Over the next 10 days (January 15th ~ 25th) more than 20 different coins would go on a short-term bull run, and make our Top Social Gainers list in the process.

Random coins were randomly breaking out – and the crowd was loving it.

The big question, of course, was – why?

7. Based on some digging, we can split the 20+ breakout coins that made our top 10 list into two distinct categories:

1. News-driven breakouts
2. Random, unexplained breakouts - some with a common pattern

Let’s quickly go over the first category:

8. Here’s a few examples of news-driven breakouts:

-Augur’s run was propelled by the launch of Veil prediction market.
-MTH spiked with the launch of its new reputation framework.
-QKC’s listing on Upbit helped its rally.
-ARN climbed steadily before its Bithumb listing.

9. However, there were a fair few coins whose rally just couldn’t be fully or mostly attributed to the 24-hour crypto news cycle.

This is where things got interesting.

For example, DLT (Agrello) spiked 173% in two days, between January 13th and January 15th:

10. Our Daily Active Addresses metric for DLT spiked on Jan 15th, meaning a number of new players entered the market.

Also, our Token Age Consumed metric showed some long-term HODLers taking advantage of the pump and selling off their holdings on January 18th.

11. Oddly: there was a large trx of 2M+ DLT on Jan 19th.

Some of those seem to were:

1. Withdrawn from Binance to a non-exchange address (Jan 17th)
2. Moved to a new address after 2 days
3. Sent back to Binance wallet that originally held them
4. Sent to a new Binance wallet

12. A similar thing happened with TNT.

On January 15th, as TNT was breaking out, a large amount of tokens entered the exchange through various bounces.

The pattern is similar to what we saw with DLT. Binance was again bouncing the coins around several addresses for some reason.

13. A similar thing happened with GTO.

A large sum of GTO tokens entered exchanges btw. Jan 13th and Jan 17th.

Once again, our Top Token Transactions showed Binance was bouncing these breakout coins between different addresses.

14. One more:

VIBE spiked by 135% from Jan 13th to Jan 15th.

As with previous pumps, we again saw a similar pattern of a large number of coins moving in and out of Binance on January 15th.

15. There are few other examples as well, but you get the jist. Most coins that exhibited this pattern traded mostly on Binance.

POWR, for example (mostly trading on Bithumb) didn’t follow this pattern when it too broke out:

16. So - what does this erratic token movement mean? We can't know for sure, tho we do have a couple of *possible* theories. We would also like to hear yours.

Here’s the top 3 theories that we have:

17. Theory #1: These ‘non-exchange’ addresses could be unidentified Binance wallets (cold wallets?), and Binance is doing some regular housekeeping.

If smo can confirm this, please let us know. We do have a solid database of exchange wallets, and have so far identified 220+

18. Theory #2: Most of the wallets involved are btw $20M and $140M. If these are not owned by Binance, they belong to some seriously affluent whales.

If that’s the case, what exactly are they up to? And why these coins? At this point, we can mostly speculate.

19. Theory #3: As Binance was involved in all large transactions, it may be possible that Binance is one of the hodlers looking to liquidate some of its coins?

When considering the size and transaction behavior of these wallets, it'd make sense that they belong to an exchange.

20. Could Binance be liquidating some of the coins it holds to fund its current/future business development efforts? We can't tell for sure.

Would be helpful if @binance can shed some light on this.

21. These are our top 3 theories anyhow. What do you think?

For those interested, here’s our full analysis of these and other breakout coins of the past 15 days:

santiment.net/blog/breakout-…