This article introduces the definition of Token Balance distribution and how to use it for your crypto trading.
Definition
The Token Balance Distribution chart shows the top 100 addresses that hold the largest amount of a particular token and their proportion in the total supply.
For instance, given the total supply of examplecoins is 100,000.
Top 10 addresses hold 10,000 coins;
Top 20 addresses hold 20,000 coins;
Top 50 addresses hold 30,000 coins;
Top 100 addresses hold 40,000 coins.
The Token Balance Distribution of examplecoins will be Top 10 holders 10%, top 20 holders 20%, top 50 holders 30%, and top 100 holders 40%.
How can I use it?
Generally, the Token Balance Distribution indicates the potential ability of these top addresses to influence the token price.
1. Evaluate the price fluctuation of a token
For a token with a high concentration amount of holdings in a few addresses, price volatility is easier to occur by considerable sell-buy actions from these addresses.
Before starting a crypto investment, you can check the Token Balance Distribution beforehand to classify the wealth concentration.
For example, suppose the metric shows that the top 10 holders obtain 95% of the total supply. These top balances can easily affect and even manipulate the price trend.
Oppositely, another example is that suppose the Top 10 holders possess 10% of the total supply. Then, the price affected by the buy/sell actions of these top 10 holders is not as easy as in the previous case because they hold 10% of the total supply, and the rest 90% is from the mass market.
2. Capture the bullish signal
In general, top holders of a particular token could be professional institutions, crypto whales, project officials, or exchange wallets. If the Token Balance Distribution is concentrated, some Smart Money addresses are buying in during price fall, and this action will strongly support the price.
| Metric | Condition | Signals |
| Token Balance Distribution | Concentrating during price falling | Bullish |
Positive signals that institutions or crypto whales have finished the token accumulation at a low price and are ready to pull up the price.