Recently, I’ve seen a bunch of people watching large on-chain transfers and exchange hot/cold wallets, shouting "Smart money is coming/going" whenever there's movement... To be honest, I’ve always been skeptical about address profiling. Labels and clustering can indeed help you filter out a lot of on-chain junk data, but fundamentally it’s just “guesswork”: you can’t cluster addresses that belong to the same person if they split into dozens of addresses, and it’s also common to treat fund flows in the same sector as if they’re from the same individual.

My current approach is pretty crude: I only treat labels as hints, not conclusions. When I see so-called inflows and outflows, I compare them with my own entry and exit conditions and logs; if they match, I act, if not, I just ignore the hype. After all, trading based on someone else’s wallet stickers ultimately still comes down to you bearing the drawdowns… Let’s see.