4 Crypto Analysis Tools to Spot a Winning Coin

Mian
5 Min Read

Do you aspire to make a fortune through crypto but don’t know which coin to choose for getting a multi-bagger return? This article will provide you necessary tools to analyze a potential 100x crypto coin. It summarizes three types of crypto analysis tools; crypto fundamental analysis tools, crypto sentiment analysis tools and crypto technical analysis tools.

A. Crypto Fundamental Analysis Tools:

  1. White paper

All crypto companies issue white papers containing major details about the project, technology, management, key utility, floating quantity, future plans, regulations, etc. Studying white papers is the key to knowing about cryptocurrency fundamentals.

  1. Equity stats

Equity stats tell the number of crypto coins free float in the market and total market capitalization. A huge number of free float is itself a barrier for crypto prices to rise as greater supply readily fills the demand in the market.

  1. Utility

Crypto utility is the most important fundamental factor determining the future performance of a coin. The utility of a cryptocurrency refers to the problem solved by the crypto project. If a crypto project is very helpful in solving a major problem, its adoption by companies as a payment channel will increase its demand. Increasing demand for a crypto coin will push its price upwards.

  1. Management analysis

Management plays a major role in uplifting a cryptocurrency. If management is actively pursuing the layout plan, striving for innovation, and promoting adoption, crypto will get acceptance and appreciation.

  1. Mining Rate

The mining rate is the most critical part of crypto fundamental analysis because it disturbs demand and supply in crypto market. A higher mining rate increases supply and thus hammers price.

  1. Social Reputation

Social reputation paves the way for crypto acceptance and adoption, so drives the crypto price.

B. Crypto Sentimental Analysis Tools:

  • Overall Business Environment

If the business environment is favorable for growth, crypto market sentiment will be bullish. Fear of recession turns crypto sentiment to bearish.

  • Fear Index

The fear index tells how people perceive about cryptocurrency market. A higher fear index translates into bearish sentiment for the crypto market.

  • Any new Countries’ policies

If countries are developing policies for crypto acceptance and adoption, crypto market sentiment will get bullish. Similarly, the acceptance of a coin as a gateway for payment by large multinational companies is really positive for cryptocurrency.

C. Crypto Technical Analysis Tools:

  1. Trend line

Draw a trend line by connecting successive lows. If the trend line direction is upward, the crypto trend is bullish. A downward-pointing trend line indicates a bearish crypto trend.

  1. Moving average

Apply the moving average (13) to a crypto price chart. If the crypto price trades above the moving average, crypto is bullish. Conversely, if the crypto price is trading below the moving average, the crypto is bearish.

  1. Channels

Draw two trend lines; one connecting highs or peaks of a crypto price line and the second, connecting troughs or bottoms. If 90% of the crypto price movement is within this channel, it is a great opportunity to trade the crypto between the channel.

  1. Technical chart patterns

Carefully look crypto price chart for chart patterns like wedge, triangle, flag and, head & should. These chart patterns offer a definite price move after the breakout.

  1. Technical Indicators

Technical indicators are useful tools for deciding crypto direction. To determine crypto trend, use MACD, Bollinger Band, Ichimoku Cloud, Moving Average Cross over, and Relative Strength Indicator (RSI). To identify change in crypto trend, use stochastic and Elder Force Index.

Point to be noted:

A crypto project selected through the above crypto analysis tools will offer a multi-bagger return only if it is bought at the right time and you keep on holding it for an appropriate duration.

End Note:

Crypto analysis tools are good for scrutiny among a large number of crypto projects. A trader should start with a fundamental analysis of crypto projects. After short-listing good crypto projects, one should study market sentiment with sentiment analysis tools. Finally, Technical analysis tools can determine the right time and price for buying or selling a cryptocurrency.

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