📖 Transaction Types Glossary

Understanding whale activity: What BUY, SELL, TRANSFER, and DEFI transactions mean

💡 Quick Summary: Sonar tracks transactions $10,000+. Not all transactions are trades! We classify each transaction to understand if it's a real buy/sell or just wallet movements.

~15%

BUY Transactions

~20%

SELL Transactions

~64%

TRANSFER (Ignore)

~1%

DEFI (Ignore)

Trading Transactions (Count These!)

🟢

BUY

A whale is receiving tokens from an exchange or DEX. They are buying/accumulating the token.

Exchange/DEX → Whale 🐋
Money ($) → Exchange/DEX

Example: Whale receives 1,000 ETH from Binance for $3,000,000 USDT

Why it matters: Indicates accumulation and bullish sentiment. When whales buy, it often signals confidence in the token.

🔴

SELL

A whale is sending tokens to an exchange or DEX. They are selling/distributing the token.

Whale 🐋 → Exchange/DEX
Money ($) → Whale

Example: Whale sends 1,000 ETH to Coinbase, receives $3,000,000 USDT

Why it matters: Indicates distribution and bearish sentiment. When whales sell, it can signal profit-taking or lack of confidence.

Non-Trading Transactions (Ignore These!)

🔵

TRANSFER

A whale is moving tokens between their own wallets. No actual buying or selling is happening.

Whale Wallet A 🐋 → Whale Wallet B 🐋
(Same owner, different address)

Example: Whale moves 500 ETH from cold storage to hot wallet for trading

Why ignore it: This is like moving money between your checking and savings account. The whale still owns the tokens - no market impact. ~64% of all transactions are transfers!

🟡

DEFI

A whale is interacting with DeFi protocols. Could be staking, lending, or providing liquidity.

Whale 🐋 ↔ DeFi Smart Contract 📜
(Uniswap, Aave, Compound, etc.)

Example: Whale deposits 1,000,000 USDC into Aave lending pool to earn interest

Why ignore it: This is not a market trade. The tokens are locked in DeFi contracts, not sold on the open market. No immediate price impact.

How We Use This for Sentiment Analysis

Sonar calculates token sentiment by analyzing the ratio of BUY vs SELL transactions:

Bullish Sentiment: More BUYs than SELLs
Example: 70% BUY, 30% SELL = Accumulation phase 🟢

Bearish Sentiment: More SELLs than BUYs
Example: 30% BUY, 70% SELL = Distribution phase 🔴

Neutral: Balanced or stablecoin
Example: 50% BUY, 50% SELL = No clear trend 🟡

📊 Real Data (Last 24h):
• Total tracked: 1,000 transactions
• Real trades (BUY/SELL): 346 (34.6%)
• Ignored (TRANSFER): 642 (64.2%)
• Ignored (DEFI): 12 (1.2%)

Without filtering out TRANSFER/DEFI, our sentiment would be meaningless!

Frequently Asked Questions

Why don't you count TRANSFER transactions?

Because they represent ~64% of all activity but have zero market impact. Including them would dilute the signal and make sentiment analysis useless.

How do you know if it's a BUY or SELL?

We analyze the token flow direction and counterparty type:

If tokens flow FROM exchange TO whale = BUY
If tokens flow FROM whale TO exchange = SELL
If both addresses are EOAs (not exchanges) = TRANSFER

What's the minimum transaction size you track?

We track transactions $10,000 USD or larger. Smaller transactions are typically retail traders and don't reflect whale activity.

Can whales fake transfers to manipulate sentiment?

No, because we specifically filter OUT transfers. Only actual trades to/from exchanges (BUY/SELL) affect sentiment calculations. Moving tokens between their own wallets has zero impact.

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