This article introduces the Holders metric and how to use it.
The Holders metric refers to the number of addresses with balances of a particular token at the moment.
For example, on day 1, suppose 1,000 addresses hold examplecoins, and half of them sold all of their tokens on day 2. But there are 500 new addresses with a balance of examplecoins in the wallet on day 2. Thus, the Holders on day 2 would be 1,000. (1,000-500+500=1,000).
How can I use it?
Typically, the number of Holders can reflect traders’ predictions of the token in the long term. Namely, traders with optimistic sentiments are more likely to hold the token instead of swapping or cashing out.
Identify bullish and bearish signals
If the Holders number increases, more people have bought the token or received it from others in their wallet addresses, and lesser people are clearing out the tokens in their hands. As a result, the price is more likely to be stable or rise.
If this figure decreases, more traders might have already sold the tokens rather than holding them. Therefore, more selloffs may cause volatility even tank the price.