How to Assess a Token’s Selling Pressure Risk Through On-Chain Holder Concentration
Bottom line: To gauge selling pressure risk, keep an eye on the top 10 addresses' total holdings—above 70% is a red alert, below 50% is relatively safe. The real catch: market makers often spread tokens across dozens of wallets, making on-chain data look deceptively healthy. You must merge addresses that have direct transfer links to get the true picture.
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Step 1: Open a blockchain explorer and check the holder distribution
Any ERC-20 or BSC token can be checked on Etherscan or BSCScan for holder data.
Actions:
Open Etherscan (or the corresponding blockchain explorer) and enter the token contract address.
Click the "Holders" tab.
Check the combined holding percentage of the Top 10 addresses.
Threshold: If the top 10 addresses hold over 50%–70% of the circulating supply, market power is highly concentrated, and prices can easily be manipulated by a few players.
Real extreme cases:
KOGE's top 10 addresses held as much as 93%, ZKJ's were near 80%—both tokens plunged 85% and 57% respectively within two hours.
The first six wallets of LAB controlled about 82% of supply; the token eventually collapsed 96% from its peak.
SIREN's controlled addresses held roughly 94% of supply, dropping from $1.3 to $0.05 in two days.
Done when: You can find the target token's Holders page and read the total holding percentage of the Top 10.
Step 2: Merge associated wallets to reveal true concentration
Looking only at single addresses in the Top 10 is just the first step. Market makers spread tokens across dozens of addresses, each holding just 1–2%, so the Top 10 can appear "healthy."
Actions:
On the Holders list, click through the addresses with large holdings one by one and review their transaction history.
Key question: Do these addresses send funds to each other? Did they receive tokens from the same address during the same period?
Use visualization tools like Bubblemaps to group addresses that have direct transfer relationships into a single "entity."
Threshold: If multiple addresses frequently transact with each other, or received tokens from the same "distribution address," they very likely belong to the same entity. The concentration after merging is the real risk level.
Done when: You can identify at least one group of linked wallets and estimate their combined holding percentage.
Step 3: Check "Team/Vesting" labels and anticipate unlock-driven selling
Etherscan and tools like Nansen label some wallets—e.g., "Team", "Vesting", "Treasury".
Actions:
On the Holders list, note addresses with "Team" or "Vesting" tags.
Check the project's official documentation or Token Unlocks platform for the token unlock schedule.
Threshold:
If team/vesting addresses hold a large share and a major unlock is coming soon, selling pressure risk is high.
In July, LAB had linear unlocks of about 8–9% of supply, followed by a massive 282 million token unlock in mid-August. Combined with highly concentrated supply, this became one of the catalysts for a 96% crash.
Done when: You can find the target token's unlock schedule and know whether any large unlocks are due within the next 30 days.
Step 4: Use Nansen to check "Smart Money" holder quality
High holder concentration doesn't guarantee a crash—it depends on whether the holders are "long-term believers" or "short-term speculators."
Actions (requires a Nansen account):
Open the target token in Nansen's Token God Mode.
View the holder distribution chart and time series under the Holders tab.
Use Nansen CLI to query Smart Money holding percentage.
Run command: nansen research token holders --token
Threshold:
Green flag: Smart Money / fund labels occupy a high proportion in the Top 20 and their holdings are steadily increasing.
Red flag: A large share of holdings comes from "Fresh Wallets" or "Exchange" labels, and Smart Money share is low—this means supply is concentrated among short-term participants, signaling high selling pressure risk.
Done when: You can distinguish whether holdings are mostly "quality wallets" or "retail noise."
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Common mistakes
"Dispersed holdings = safe": Not necessarily. A market maker can spread tokens across hundreds of addresses, making the Top 10 look like only 20–30%. SIREN's 94% supply was distributed through hundreds of split addresses. Use Bubblemaps or Nansen for linkage analysis instead of relying on surface data.
"High concentration = inevitable crash": Not all highly concentrated tokens immediately dump. The market maker might still be in the accumulation or pump phase, and high concentration is precisely a prerequisite for pushing up the price. The key is to determine whether the market maker is in the "accumulation/pump" or "distribution" phase—combining this with exchange inflow data will be more accurate.
"Team holdings = selling pressure": Locked tokens won't dump in the short term, but be cautious as unlock dates approach.
Next step: Pick a token you hold or are watching, open the Holders page on Etherscan/BSCScan, and spend 10 minutes on three actions:
Record the Top 10 holding percentage.
Pick 2–3 large addresses and check whether they have on-chain links.
Check for "Team/Vesting" labels or upcoming unlock plans.
After these three steps, you will have a foundational view of the token's selling pressure risk.
