It does not matter how long you are in any investment sector, what you have to do is to keep learning every day. Things change and new things are created each day but the only thing to understand them is to study how they work, even Malcolm X once said, education is the passport to the future, for tomorrow belongs to those who prepare for it today.
In this article you are going to learn those three best ways of analysing the crypto market that profitable investor mostly using them to pick their best cryptocurrencies before investing in it, which are;
Fundamental analysis.
This is the method of using the gossip, stories, and facts about a cryptocurrency, its financial situation, and upcoming risk events that may move the market. According to my previous article, @stev77/top-crypto-s-tools-for-fundamental-analysis I had explained in detail about fundamental and its methods which used to analysing the crypto market. Here I will mention them with little explanation as following;
White paper, where this is like a business proposal that shows us an overview of the cryptocurrency project.
Team, these are members of a company who guide the company and its blockchain technology.
Market capitalization, it’s obtained by multiplying the circulating supply with the current price (circulating supply X current price). It is used extensively to figure out the growth potential of networks.
Circulating supply, this is the number of coin or tokens currently available and in the hands of people. It used to indicate the popularity of crypto.
News, as we know news provides information about current future or current events. Crypto volume, indicates how much crypto got traded in a given time frame. Volume in fundamental analysis is very important because it is shown how easy to buy sell crypto.
Crypto exchange platforms are webs that help people to exchange their cash into cryptocurrencies.
When you conducting your fundamental analysis it is important to analysing all of them to get a picture. But fundamental analysis has its limitation where it’s hard to know the right time to enter the market even you though you find the best crypto.
Technical analysis.
Technical analysis is an analysis methodology for forecasting the direction of prices through the study of past market data. By using different tools in technical analysis, it can help you to understand the historical movements and crypto price patterns, the most important chart patterns and indicators can help you develop your winning investment strategy for your best cryptocurrency.
If you are a crypto short term investor you have too much in technical analysis to know when to get in and get out of the market more rapidly. But if you are a long term investor you may look at the big picture in your technical analysis.
Many cryptocurrencies are too young to have a well-developed price history, but you still can use similar techniques by comparing older cryptocurrencies in the same category and applying big picture analysis to the new ones.
Sentimental analysis.
Sentimental analysis is the use of natural language processing, text analysis, computational linguistics, and biometrics to systematically identify, extract, quantify, and study affective states and subjective information. In the cryptos market, you can define it as the study of the love-hate relationship with cryptocurrencies and traders.
Here are few important sentimental elements to check before choosing your favourite cryptocurrencies.
The Crypto community, the company behind the cryptocurrency can play a role in the direction the crypto goes, but the network that participates in the currency’s blockchain technology is an important key to its success. Many cryptocurrencies directly depend on the participation of their communities, like miners and developers.
Upcoming events, You can look for upcoming events in the early stages of finding your crypto soul mate or right at the very end.
Negative press, during the period when the negative press is a hot topic, the prices are likely to plummet. However, contrary to what you may think, that exact period may be a good time to purchase because everyone is likely dumping the asset. Catch them when they’re down, and go to the top with them.
Conclusion.
By combining all of these three ways you will have a high chance of choosing winning favourite cryptocurrencies to invest in. Of course, sometimes fundamental analysis can tell you information that technical analysis cannot tell, that’s why risk to use many investors use a combination of both these days to avoid unnecessary risk.