The crypto market is an exciting but turbulent place for investors. With new projects launching daily and asset prices fluctuating wildly, it can be difficult to cut through the noise. Proper research is essential for making informed decisions. This guide covers the top tools and strategies to master crypto research.
Understanding Crypto Projects
The foundation of good research is comprehending what a crypto project does. With over 18,000 cryptocurrencies listed on CoinMarketCap, this is no small feat.
When investigating a new crypto asset, start by reading the project’s whitepaper. Whitepapers explain the utility and technology behind cryptocurrencies. Treat them as a blueprint of the project’s goals and roadmap.
Next, explore communities where the crypto is discussed. Reddit, Twitter, Discord, and Telegram groups provide a pulse on public sentiment. Be wary of hype and FUD (fear, uncertainty, doubt). Focus on balanced, evidence-based perspectives.
Here are two excellent websites for learning about crypto projects:
Founded in 2013, CoinMarketCap is the world’s most-referenced crypto data site. It tracks prices, market caps, supplies, and more for over 18,000 cryptocurrencies.
Each crypto asset page contains a summary, key details, price charts, and links to the project’s website and social channels. For newer cryptos, scroll down to the „How do I buy [crypto]?“ section for a list of supported exchanges.
Similar to CoinMarket or BTC Pro Air Trader, CoinGecko provides data and research on crypto projects. In addition to trading data, CoinGecko offers crypto guides, an events calendar, and its own Trust Score rating system.
The Trust Score algorithm analyzes activity and developer behavior to score projects. This helps gauge the legitimacy of lesser-known cryptos.
Price Analysis with Charts
While understanding what a project does is important, most crypto investors also care about price. Charts and technical indicators help traders identify trends and patterns in markets.
TradingView is the premier charting and analysis platform for crypto. It’s free to use with paid upgrades available.
The charting tools and indicators on TradingView are extensive. Features include:
- Hundreds of drawing tools
- Dozens of chart types such as candlestick, line, Heiken Ashi
- Built-in indicators like moving averages, Bollinger Bands, RSI
- Ability to create custom indicators
- News feed integration
- Analysis from top traders
TradingView can chart anything from 1 minute bars to yearly candles. Use short time frames for day trading and longer durations for investing.
Experienced traders may scoff at indicators, preferring raw price action instead. But for beginners, combining basic indicators like 20 MA, 50 MA, and MACD with chart patterns is a good way to get started with analysis.
Fundamental Analysis with On-Chain Metrics
While technical analysis focuses on charts and indicators, fundamental analysis examines underlying project metrics. In the equities market, fundamentals include revenue, profitability, management, cash flows, and more.
The decentralized nature of crypto requires a different approach. On-chain analysis looks at measurable activity on blockchains to gauge adoption and valuation.
Here are two leading platforms for on-chain intelligence:
Santiment compiles blockchain data into over 500 metrics on crypto projects. These metrics include:
- Social volume – Mentions on Reddit, Twitter, Telegram
- Exchange flows – Deposits and withdrawals
- Transactions and active addresses
- Developer activity – GitHub commits
Charts display how metrics change over time. For example, increasing social volume may signal growing interest in an asset. Santiment also calculates custom ratios like NVT (Network Value to Transactions) as valuation gauges.
Glassnode takes a focused approach, concentrating on Bitcoin and Ethereum metrics. In addition to basics like hashrate, active addresses, and exchange reserves, Glassnode employs proprietary indicators to identify trends.
- MVRV – Compares market cap to realized cap
- Reserve Risk – Estimates exchange whale behavior
- Puell Multiple – Identifies miner capitulation
Glassnode’s metrics illustrate both on-chain fundamentals and market dynamics. However, the platform is more geared towards experienced analysts than beginners.
No crypto research toolkit is complete without resources for analyzing decentralized finance (DeFi) protocols. DeFi is crypto’s fastest growing sector, with over $100 billion total value locked.
DeFiLlama elegantly tracks key DeFi data in a UI friendly for both newcomers and power users.
The main dashboard displays total value locked (TVL) across chains including Ethereum, Binance Smart Chain, Solana, and more. TVL shows the sum of assets deposited in DeFi protocols and is a measure of adoption.
Drilling down, each protocol page highlights TVL, top tokens locked, and related projects. Historical TVL charts help identify trends. DeFiLlama also tracks protocol revenue and Twitter stats.
For investors, keeping a pulse on DeFi is crucial as new disruptive applications launch continuously.
Best Practices for Crypto Research
Doing proper research is challenging even for experienced investors. Here are tips to make the process manageable:
- Take notes – Maintain a journal of crypto projects you’ve analyzed. Include metrics like TVL, social volume, chart patterns, etc.
- Stay objective – Don’t get emotionally attached to cryptos. Look at data scientifically.
- Diversify – Invest in a mix of assets across sectors like DeFi, NFTs, DAOs, and infrastructure.
- Verify information – Double check project claims against multiple sources.
- Continuously learn – Great investors never stop improving. Keep up with industry trends.
- Manage risk – Don’t overextend with crypto investments. Maintain a healthy portfolio balance.
While crypto research seems daunting, breaking the process down into chunks makes it achievable. Follow a methodical approach using the right tools, and your knowledge will expand in no time.
The projects transforming technology are also creating fortunes for savvy investors. With a fact-based process, you can capitalize on crypto’s potential and contribute to its evolution.