Spot High-Potential Memecoins With This Powerful 5-Step Strategy

Memecoins have been taking the internet by storm over the past few weeks and have made a few millionaires.

While spotting the next 1000x gem is tricky, you can do a few things to maximize your chances of hitting the jackpot.

Keep in mind that trading memecoins is particularly risky for 3 major reasons:

• There are many scams and rug pulls in the memecoin space;
• Memecoins are extremely volatile. You can become a millionaire or lose all your capital overnight;
• Every single memecoin ends up crashing back to zero, and since memecoins don’t have any real value, very few of them do a second pump.

In this post, we’ll go over 5 steps you can take to figure out which memecoin will skyrocket next.

1. Detect trending coins on DEXTools

DEXTools is one of the best DeFi analytics platforms online and a great place to start your memecoin research.

Apart from displaying a live chart for any token on any blockchain, it also provides plenty of useful insights into the DeFi markets and each token.

The first thing you can do with DEXTools is to see Hot pairs and Daily gainers on its homepage. This way you get an idea of what tokens are currently trending and where the money is flowing.

You can also check out Live New Pairs from the menu on the left to see which tokens have recently been listed. But be very careful, you will find many scams and rug pulls here.

When searching for a token on DEXTools, the best is not to type the name of the token but its contract address to avoid scams. You can get the address on the token’s official site or sites like CoinMarketCap and CoinGecko.

Recently, DEXTools added a new feature to their platform to help you better assess the safety of the token by offering GoPlus Security metrics for each token.

For example, on PEPE’s page, on the bottom left, we can see that its contract is verified, that it’s not a honeypot, that there’s no buy and sell tax, and so on. By clicking on More info, we can get many more details about PEPE’s contract.

On the top left, you can get other important information regarding the token, such as the total pool liquidity, the market cap, or the number of holders.

2. Find whale addresses on Bubblemaps

A great way to find high potential memecoins is to follow whale activity. You can start on Bubblemaps to identify whale wallets.

Bubblemaps is a simple but very useful DeFi application that lets you see which addresses are holding what proportion of a specific token.

For example, if we type PEPE in the search bar, we get the following result:

We can see that the biggest proportion of PEPE tokens - 10% - is currently held by the Binance exchange. Then we have some other exchanges such as OKX, MEXC, Huobi, or KuCoin, followed by whale addresses.

On a side note, some wallets are automatically greyed out. These are Liquidity Pool addresses. They’re useful for making sure that liquidity is not being removed from the pool which could indicate a rug pull.

But let’s focus on whale addresses. There are about a dozen wallets that hold between 0.5 and 1.1% of PEPE tokens. You can copy these addresses to Etherscan and track their activity - see if they’re selling tokens that you’re in which means it’s likely time to get out, and which other tokens they’re holding and buying.

In a minute, we’ll cover a more user-friendly free tool to monitor whale activity.

3. Follow @Lookonchain for smart money wallets

LookOnChain is an awesome Twitter account that publishes smart money blockchain activity.

But what exactly is smart money?

Investopedia defines smart money as investments made by experienced investors, such as institutional investors, hedge funds, or private equity firms, with a proven track record of success in the financial markets.

Tracking and copying smart money activity can be a very profitable strategy as these investors usually have information that retail investors lack. This lets them make informed decisions ahead of the crowd.

With any other type of investing, following smart money can be difficult. But in the crypto world, it’s easy because all transactions are recorded on the blockchain and are publicly available.

For example, in this thread, Lookonchain tweeted that several PEPE whales sold their tokens to buy another memecoin called LADYS which was at the beginning of a large pump.

In its tweets, Lookonchain usually provides links to wallets on an app called DeBank.

4. Monitor whale and smart money activity on DeBank

Once you identify whale and smart money addresses on Bubblemaps and Lookonchain, you can follow them on DeBank.

DeBank is another great DeFi tool. It allows you to track wallet activity - token holdings and transactions - across all EVM-compatible chains.

It’s more user-friendly than blockchain explorers such as Etherscan, and it lets you follow profiles you find interesting.

Let’s copy one of the addresses mentioned in the above Twitter thread into the DeBank search bar.

In the Transactions tab, we can see that this person has been swapping large amounts of PEPE tokens for the LADYS token just 4 hours ago.

From its Portfolio tab it’s clear that this wallet only has a few cents worth of PEPE tokens left and now holds almost $1 million worth of LADYS.

By following this wallet on DeBank, you will be able to see when its owner dumps LADYS and if they decide to buy something else.

To do this, click on Follow at the top of the wallet profile.

Then click on Home to go to your profile and you’ll have a list of all the addresses you follow on the Following link or tab. You will need to connect your wallet to be able to follow other wallets.

5. Measure social interactions on LunarCrush

Finally, LunarCrush is a crypto analytics platform that provides insight into which coins are trending on social media.

Key metrics on LunarCrush are the Galaxy Score, the AltRank, and the Correlation Rank.

The Galaxy Score measures how well is an asset performing against itself from a social volume, market volume, and price perspective. A score of over 80 is good, and a score below 50 is poor.

The AltRank assesses how well a token is performing against the entire crypto market. An AltRank of 1 is the best.

Finally, the Correlation rank tells you if the asset’s social volume, market volume, and price are moving in the same direction. A Correlation rank of 5 means these metrics are all moving up together, and a Correlation rank of 1 means they are currently not.

By clicking on Global Metrics, you can display metrics such as social mentions, social engagements, or Twitter volume to see which tokens are gaining the most traction online.

These metrics allow you to measure the depth of community interaction across social posts as well as to assess whether there is more bullish or bearish community sentiment surrounding the token.

Keep in mind that social sentiment can change very quickly, so these metrics should be observed over time.

Bottom line

With their insane volatility, memecoins can create generational wealth for the lucky few. However, the path to finding explosive memecoins is thorny and full of traps.

In this post, we went over 5 tools that can help you make informed decisions when venturing into the memecoin mania.

By spotting hot tokens on DEXTools, tracking whale activity on DeBank, and social sentiment on LunarCrush, you can put yourself in a prime position to catch that next big wave up.

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Disclaimer: This content is for educational purposes only and should not be considered as financial or any other advice. Always do your own due diligence before investing your hard-earned money.