How do I learn to analyze cryptocurrencies? Five criteria that should not be missing in any cryptanalysis | news

Any kind of investment should be preceded by an analysis. But cryptocurrencies are still a young asset class, so beginners in particular have difficulty applying the relevant criteria. There is no doubt that cryptanalysis can be extremely complicated. To begin with, however, an understanding of the basic criteria, which should not be missing in any analysis, is sufficient.

Fundamental analysis in cryptocurrencies

The fundamental analysis is actually known from the stock market and pursues a clear idea. It is based on the assumption that a cryptocurrency (or a company) has an intrinsic value. Reference is made to the fact that cryptocurrencies have a real use case in the future. While fundamental analysis dares to provide an overall picture of the value of a cryptocurrency, technical analysis takes into account historical prices and chart indicators. In this article, the focus is on fundamental analysis – but a more technical approach is also promising and should be considered as a supplement.

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1. Distribution & Tokenomics

Whether it’s presale or an established altcoin, it’s important to look at distribution and tokenomics. Because in the case of a crypto pre-sale, the planned distribution can be quickly analyzed with tokenomics. Here, the developers and those responsible should not be involved too strongly in the project, but a small participation can still encourage continuous development of the project. The total supply should be limited so that investors’ capital is not continuously diluted. At the same time, on-chain data shows whether crypto whales dominate and pose a risk in token distribution, or whether there is a relatively balanced distribution.

As a starting point, something in between is always recommended. When crypto whales are interested in a coin, it indicates future potential. If only a few crypto whales hold the coins, it poses a risk of massive sell-offs that private investors lose out on.

2. Micro and macro level concept

The concept of a cryptocurrency is the basis for long-term success. The exception proves the rule when we think about Dogecoin. The idea and vision behind a cryptocurrency can be analyzed in the team’s remarks, the white paper or on the website.

A multi-perspective approach that includes macro and micro levels is recommended.

The micro level is about a unique selling point for the cryptocurrency. Is the concept convincing in itself? Does the token make sense in its own network and does the coin have some utility from which an increasing value can feed?

On a macro level, investors are looking beyond the crypto horizon and questioning its real-world implementation. For example, could Bitcoin enable cross-border payments worldwide with the Lightning network? Is there already massive competition here or does BTC seem like the best concept?

3. Team & Developer

The team is not always known. With Bitcoin, it is still unclear who is behind the pseudonym Satoshi Nakamoto. However, for most coins the team is known and developer activity can be measured in the on-chain data. Without the right people behind the cryptocurrency, sustainable success becomes more difficult. Key team members should be scrutinized, their experience in the crypto space investigated. In this respect, coins are indistinguishable from startups. The leading people are decisive for the development.

4. Marketing & Community

In the case of technically influenced cryptocurrencies, developers often rely on the use case and any unique selling points of a technical nature, which should be persuasive in the long term. But marketing is an important part of cryptocurrencies. Awareness must be gradually increased to ensure a positive share price development. Ergo, you should look at which platforms report on the cryptocurrency. Are influencers promoting the cryptocurrency or are there online marketing campaigns? The community is actually a separate point for a crypto analysis – but the growth of the community often corresponds to the success of marketing. In addition to the number of followers, engagement in social networks is also important.

5. Technological perception

Even if you are not a homegrown crypto expert or IT specialist, no analysis should be without a look at the technological design of a cryptocurrency. It is, for example, about the consensus mechanism on which the blockchain is based. The block reward or difficulty should also be included. The white paper is always a good starting point to get initial information about the technology.

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Who doesn’t know her? The almost immeasurable amount of data that we are inundated with in the digital age. The search for the right information is a challenge, especially when you consider that according to data from CoinMarketCap, there are now over 22,000 cryptos and coins. It is recommended to use advanced analysis tools to be able to perform truly sound analysis and to make trading decisions professionally.

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But previously there were mostly offers with Glassnode Enterprise or Bloomberg, which were not affordable for the private trader. Many competing platforms only analyze a certain niche at the same time – the new platform at the next level Dash 2 Trade takes a comprehensive approach and can add massive value to the analysis of cryptocurrencies in the future.

The launch of the beta version of the presale dashboard will take place this week, and only a few days later the native access token D2T will complete the ICO. There appears to be upside potential for Dash 2 Trade Coin as well as far reaching application potential thanks to the use case that is really in demand for the advanced platform for crypto analysis and curated trading signals.

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