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Introduction

Fundamental analysis can be described as the science of identifying when an

asset is undervalued or overvalued (Investopedia).

Identifying Undervalued Assets

The best time to buy an asset, of course, is when it is undervalued. Many have

heard the expression "Diamond in the rough."

As the crypto industry is still in its early stages, it can be difficult to distinguish

between the good and the bad projects, as some projects are over-hyped from

lots of noise on social media. From employing fundamental analysis, investors

can perform more due diligence and hopefully identify those under-valued

projects which are worthwhile investments.

1. The Beginning: Fundamental

Analysis Before Crypto
The first conceptualization of fundamental analysis can be traced back to the

1930s in the book Security Analysis by Dodd and Graham which was published

in the aftermath of the 1929 stock market crash. This book warned investors of

speculative behaviour, and encouraged readers to instead look for assets which

were selling below their specified price.

In their book, Graham and Dodd laid the foundation of fundamental analysis.

The proposition of fundamental analysis was to meticulously analyse financial

statements, studying a company‘s fundamentals, and focusing on an asset's

long-term potential, to better identify undervalued investments, as opposed to

just sticking to candlestick movement, as with Technical analysis.

1.1. Why Fundamental Analysis is relevant

for crypto
While it initially started with stocks, over the years, fundamental analysis is now

also being applied to other asset classes, given its accuracy in analysing and

assessing the value and risks associated with other asset classes.
Also, given the volatility and hype surrounding the crypto world, fundamental

analysis can be useful in analysing the crypto market's value.

The earliest application of crypto fundamental analysis was an assessment of

the price movements of Bitcoin and some of the earliest altcoins. The bulk of

what that entails included technology assessments, whitepapers, technical

document assessments, and regulatory assessments.

As the crypto-assets space evolved beyond Bitcoin and other proof of work

(PoW) chains following the emergence of smart contracts, more comprehensive

approaches emerged. Recent fundamental analysis tools include: crypto project

team expertise assessments, tokenomics analysis, reviewing partnerships,,

utility assessment,, and crypto-assets network metrics, security audit status; all

to assess the intrinsic value and growth potential of crypto.

The uniqueness of blockchain technology and its differences to TradFi assets

means that certain tools of fundamental analysis (e.g., discounted cash-flow

analysis, price-to-earnings) are not applicable when assessing crypto projects.

Below we cover some of the relevant tools for assessing crypto projects.
2. Fundamental and

Technical Analysis: An

Important Distinction
Before we move on, let's establish the distinction between technical analysis

and fundamental analysis, for the sake of clarity.

Fundamental Analysis employs both qualitative and quantitive information to

assess a crypto projects intrinsic value, while technical analysis assesses

historial price data to try and predict future price action.

Imagine you want to buy a piece of real estate. Fundamental analysis would

mean checking the surrounding neighbourhood ti evaluate its potential for

growth (e.g. local schools, hospitals, transport links), as well as inspecting the

property.

On the other hand, Technical analysis would mean only checking the historical

price trends of the house and houses in that area before making a decision on

whether or not the property is a good buy.

3. Key aspects of Crypto

Fundamental Analysis
There are a variety of data points that can inform a project‘s intrinsic value.

Considerations include the development team, technology, and provided utility,;

all of which are covered here:

3.1. Development Team

The parameters for assessing a crypto-assets project‘s team are quite simple.

You ought to be on the lookout for reputable educational background, past work

experiences in a relevant field, previous successes with another company, and

perhaps they have even all worked together previously at another crypto project.

Teams with great direct or complimentary professional experiences, and a great

reputation can be a clear indication of a great product.

3.2. Technology and Blockchain in Crypto

Analysis
Blockchain technology (Bitcoin, Ethereum, Polygon) is the infrastructure that

powers a crypto-asset (e.g. BTC, ETH, MATIC). The blockchain technology is

like the power station and power lines that distribute the electricity supply

(crypto) to end-users.

A sound blockchain infrastructure, is essential to a token's overall utility and can

dictate a project‘s price action in the market, just as a sound power line is

essential for great power delivery. A stronger blockchain technology can lead to

the processing of a higher number of transactions per second (TPS) which is

needed for a blockchain to scale as more users join the network. A blockchain

technology covers areas such as scalability, security, fees and transactions

transparency.

Although Bitcoin‘s PoW mining protocol and its high hash rate have drawn a lot

of criticism for its energy consumption levels, the PoW mechanism is key to this

blockchain‘s security. Bitcoin is however gradually becoming greener, in fact

around 50% of BTC is mined using renewable energy sources (X).

Ethereum's blockchain, on the other hand, doesn‘t just offer transaction security

and network strength. Its self-executing l smart contract infrastructure also

provides a truly decentralised network for thousands of crypto-assets. This in

turn all requires Ether as network fees for computing cost for operating on

Ethereum's Virtual Machine (EVM).

Blockchain technology directly enhances the utility that a crypto can offer, this

can have a corresponding future price impact.

3.3. Token Utility and Use Cases in Crypto

Analysis
Following the losses from the 2017 ICO bubble, investors should be aware of

the facade that surrounds ICO-type tokens. When analysing a digital asset you

want to invest in, it is important to consider its use-case and token utility value

and how important and practical it is.

Ethereum (ETH): the pioneer in smart contract solutions; which enables

thousands of decentralised applications (dApps), non-fungible tokens (NFTs),

and general smart contract applications. These activities require Ether for

network fees given its primary utility within its infrastructure, creating demand for

Ether.

Solana (SOL): has a utility across its smart contract infrastructure for lightning-

fast micro-size transactions, which were nonexistent at the time of its launch.

Solana, however, may have sacrificed the highest levels of security for speed.

Avalanche (AVAX): offers great scalability and security for smart contracts, like

no other, and has its primary token utility from network fees paid.

At the end of the day, a crypto-asset with a practical purpose is more likely to

gain traction over time, driving demand and influencing price action.

This leads us to the next point, which is a crypto‘s tokenomics and distribution

plan.
3.4. Tokenomics and Distribution
A crypto‘s tokenomics and planned distribution are two internal and external

factors, at the core of its valuation. These two factors can make or break the

value of a digital asset in the crypto market.

Take Bitcoin, for example. Bitcoin tokenomics has a 131-year-long deflationary

plan built into its supply. Every four years, its block reward from its miner's

incentive is halved by 50%. This is against a finite 21 million total supply. This

creates an organic scarcity for Bitcoin transactions, driving demand high against

a fixed token supply, and limiting how many units are introduced over time.

Ethereum, on the other hand, does not have a finite supply like Bitcoin; rather it

has an algorithmic controlled issuance rate. The Ether has a capped supply to

limit its inflation, using a recent 2021 update called EIP-1559 that introduces a

fee-burning mechanism to reduce its total supply over time, potentially making it

a deflationary asset.

Also, Ethereum allows mining nodes (individuals whose computing power keeps

the network operational) to charge higher fees during periods of high network

congestion. This automatically translates to a surge in prices with the growing

use of the network.

With new token launches, you should review the distribution plan the project's

dev team has coming.

A Quick Tokenomics Questionnaire

 How are the tokens allocated?

  What fraction goes to the team, and how much is allocated for operational

costs? You definitely don't want to invest in a crypto project where there is

a high risk of a massive sell-out by the team.

 Are the team's tokens vested? If yes, how long and how are they vested?

 Is there a network tax for transactions? If yes, what fraction of each

transaction goes to tax? It has to be within reasonable figures.

 What is the size and plan for network fees?

 Finally, what is the distribution plan and timeline for all of its supply

allocations?

A balanced supply and distribution scheme builds trust. Also, a controlled token

release can create scarcity and boost prices, as we have seen with Bitcoin and

Ethereum.

3.5. Partnerships, Adoption, and Ecosystem

Partnerships are a major indicator of how well and how prepared a crypto team

is in delivering their use-case promises. It also gives an idea of where a team is

headed. Great and meaningful partnerships go to show a team playing the long-

term game.

Solana (SOL), in its early days, forged strategic alliances with tech companies

like Serum (SRM) and Chainlink (LINK). The goals were to incorporate

decentralised finance (DeFi) and decentralised oracle solutions, as we now

have with Solana for its smart contract ecosystem.

A good way to spot a great project is the type, nature, and intent of its direct and

strategic alliances. Great partnerships generally mean a good reputation and

longevity.

3.6. Whitepaper and Documentations

Whitepapers and technical documentation contain the blueprint of a token‘s

utility, making it a great piece of info in its valuation. With it, you can gauge the

project's credibility, adoption, technology, and governance.

With whitepapers and project documentation, you want to check for the project's

purpose, technology, use cases, token utility, and tokenomics. From each

document's abstract or executive summary, you want to understand what the

value proposition of the crypto is from a use-case and token utility standpoint.

Drawing from Warren Buffet's good old fundamental valuation guide:

“Never invest in a business you cannot understand."

At the end of the day, you need to understand and make sense of a crypto-

assets' value proposition. There has to be a real need for the use-case. The

whitepaper should show what real-world problems it addresses and how it

employs the blockchain, and any other stated technology, to do this.

3.7. Code Audit and Security

A thorough code audit assesses a crypto's smart contracts and underlying

technology for vulnerabilities or weaknesses. This is crucial to avoid potential

exploits or hacks. Audits should come from reputable third-party auditing firms.

A great audit report should show transparency in detailing identified issues and

their resolutions.

A crypto-asset that has undergone successful audits by an established security

firm like CertiK or Trail of Bits, and has critical issues addressed, demonstrates

a commitment to security.

Aave (AAVE), for example, underwent multiple audits and code improvements

after its launch, which is generally a good sign of commitment to security.

Crypto projects with no audit reports or unfounded audits from untrustworthy

firms are a red flag. Also, unresolved critical vulnerabilities are a major red flag.

You also want to be on the lookout for bug bounty programs, as well as ongoing

vulnerability assessments and responsible disclosure policies.

For example, projects like Ethereum (ETH) and Cardano (ADA) have well-

established security protocols, significant bug bounties and actively have

addressed past vulnerabilities.

3.8. Regulatory Compliance

Regulatory and legal compliance are major determiners of a crypto's long-term

value. Several cryptocurrency platforms and token-based projects have gone

belly up just for stepping on a legal or regulatory landmine.

Investors, in their analysis, ought to check if the crypto complies with relevant

regulations and follows industry best practices, for all markets it seeks to enter,

or sell to.
Non-compliance or pending legal issues are red flags and pose significant risks.

3.9. Financial Evaluation: Market Cap,

Liquidity, and Volume

Market Capitalization

A crypto‘s market cap is pretty much a straightforward representation of its total

value at the time it is being calculated. It is a measure of the current price

multiplied by its total circulating volume (supply). It's crucial to remember that a

high market cap does not accurately tell how much value a crypto-asset is

worth.

Rather, it can give you a rough sense of where a digital asset stands in the

market, relative to other assets. A high market cap is generally seen as more

established and recognized. Low Market Cap, on the other hand, may suggest

that the crypto is relatively unknown and, of course, undervalued.

A promising low market cap project could represent a high-risk/high-reward

buying opportunity if it is deemed from sound fundamental analysis that it is

under-valued. However, it can also indicate higher risk and less liquidity. The

best place to find the market cap is from on-chain crypto-asset indexing

platforms and not exchanges. A great place to find these on-chain metrics is

sites like Coingecko. The vast majority of investors keep an eye on these

metrics across these platforms.

Liquidity
This is how easy it is to sell or buy a token, without disrupting prices, in the

process. High liquidity means the market thinks an asset is worth what its

quoted price is, hence there is someone somewhere willing to buy it for what its

market price is and vice versa.

Liquidity is generally influenced by the number of buyers and sellers in the

market and the overall depth of the order book on exchanges.

Volume

Volume is simply the measure of unit buys and sellouts a crypto has over a

given period. This measure is also considered with technical analysis as it is

with fundamental analysis.

High volume can indicate either strong selling or buying, you want to be on the

lookout for projects with growing demand volume.

3.10. Crypto Indicators for Fundamental

Analysis
Traditional fundamental analysis tools like price-to-earnings ratio are not

relevant to crypto as they don‘t generate earnings in the same sense. As such,

there are other quantitative tools for assessing crypto projects: Network Value

to Transactions Ratio (NVT)

Network Value to Transactions Ratio (NVT) gives an on-chain insight into a

coin's value from what its network's activity reveals about its transaction value.
NVT gives an assessment of the valuation and health of a token‘s network,

providing on-chain activity insights as it concerns a digital asset‘s value.

How NVT is Calculated:

A great place to find this transaction count is on a blockchain explorer. For

Bitcoin, the Blockchain Explorer is a good one, for Ethereum or ETH-based

tokens Etherscan is the go-to explorer, and for Binance Smartchain tokens, BSC is

the most recommended.

Afterward, NVT is obtained by dividing the market capitalization of a token by

the daily transaction value. That is:

NVT = Market Cap / Daily Transaction Volume.

A high NVT suggests that the market capitalization of a crypto surpasses its

daily volume, indicating a likely overvaluation. And a low NVT means a crypto is

undervalued.

NVT gives a reality check on where the current market price is headed. An

overvalued crypto asset simply signals that prices will eventually return to their

actual value and is likely not the best time to buy an asset.

3.11. Market Value to Realised Value Ratio

(MVRV)
Market Value to Realised Value Ratio (MVRV) measures a crypto-assets's

market value in relation to its realised value. This helps investors assess its true

valuation.
How MVRV is Calculated:

To calculate MVRV, you have to divide a crypto's market cap by its realised

capitalization. The realised cap is an attempt to measure the last cap of a token

across its various holding wallets. The realised market cap discounts for the

actual cap of every token, from the last time every wallet holding the crypto was

active.

The reality is that the market cap of an asset is only fairly accurate for active

addresses. Since only active addresses bought the tokens at the present market

prices or are close to the current market price. Inactive wallets are likely bought

at far cheaper prices, showing many traders or investors waiting to take profit.

This, by the way, depends on the digital asset and how long a wallet has been

inactive.

An MVRV significantly above 1 shows signs of overvaluation, as the current

market value exceeds the average purchased value at which some investors

bought the token.

On the other hand, a low MVRV that is below 1 suggests undervaluation, which

is a sign to get into the market. The result provides insights into whether the

asset is overvalued or undervalued.

4. Conclusion: Key

takeaways
As the crypto market evolves, investors will continue to recognize the

importance of understanding crypto fundamentals that drive value, and

investment decisions, and not just chasing price trends.

Whether it's Bitcoin's scarcity, decentralised nature and robust security,

Ethereum's diverse EVM ecosystems, or Solana's lightning-fast transaction

solutions, sticking to the fundamentals will continue to mean the difference

between the winners and losers, and that is something to think about.

This article is not to be considered financial advice as it's for informational

purposes only. Crypto-assets investments carry significant risks and past

performance is not necessarily indicative of the future nor a reliable indicator of

the likely performance of any investment.As you are likely aware, in-depth

research and sometimes the help of an expert may also help you to avoid

common pitfalls. If you need such help, make sure to contact a certified financial

professional.

Stay safe, stay informed!

If you don‘t already have an account with One Trading, feel free to check out

our website and sign up: www.onetrading.com

What Are the Key Elements

of Fundamental Analysis in

Crypto Trading?
What makes a cryptocurrency worth investing in? It‘s not just about the

buzz or the price swings. Fundamental analysis dives deeper, looking at

the core factors that give a digital currency its value.

In crypto trading, this means going beyond the surface and

understanding what really drives the market. This article aims to unravel

the key elements of fundamental analysis in the crypto sphere. We‘ll

explore what to look for, from the technology behind the coin to market

demand and more. Additionally, we will see how you can use

Kriptomat‘s advanced tools and features to refine and improve your

trading strategies.

If you‘re curious about what makes one cryptocurrency stand out from

another, or how to make informed choices in your crypto investments,

you‘re in the right place. Let‘s break down the essentials of fundamental

analysis in crypto trading.

Start Trading with Kriptomat
Sign up today!

What is fundamental analysis in crypto?

Fundamental analysis in crypto trading is like digging beneath the

surface to understand what truly drives the value of a cryptocurrency. It

involves assessing a range of factors which is vital for long-term

investment strategies to evaluate the inherent worth of a digital asset.

Now, how does this differ from technical analysis? While fundamental

analysis focuses on the ‗why‘ behind a cryptocurrency‘s potential

success, technical analysis zeroes in on the ‗when.‘ Technical analysis

is all about market patterns and price movements. It tells you the best

times to enter or exit the market based on historical data.

Dive deeper into technical analysis with our informative guides: ―What

Are the Key Chart Patterns Used by Crypto Traders?‖ and ―What Are

the Most Popular Technical Indicators in Crypto Trading?‖

In crypto, these two methods complement each other. Fundamental

analysis guides investments, while technical analysis aids in timing

trades. Mastering both enhances your trading strategy.

Project’s fundamentals
Digging into a cryptocurrency‘s fundamentals is crucial for

understanding its potential. Let‘s break down what to look for:

Project’s whitepaper and roadmap

The whitepaper is your starting point. It‘s where you‘ll find the project‘s

vision, goals, and details on the technology. Does it solve a real

problem? Is it feasible?

The roadmap gives you a timeline of what the project plans to achieve

and when. It‘s a progress report and a promise. Are they hitting their

milestones? What‘s coming next?

Explore how to effectively analyse a crypto white paper in our guide ―A

Beginner‘s Guide to Analysing Crypto White Papers Before Buying‖.

Team and developer activity

Who‘s behind the cryptocurrency? Assess the team‘s expertise and past

accomplishments. A strong team can be a sign of a project‘s credibility

and potential for success. Check out their development activity. Are they

actively working on the project? Frequent updates and community

engagement are positive signs of a healthy project.

Technology and use case

What‘s under the hood? Evaluate the technology for its scalability,

security, and innovation. Is it just another blockchain, or does it offer

 something unique? The use case is about applicability in the real world.

Does this cryptocurrency solve a significant problem? Can it disrupt or

improve existing systems or industries?

Understanding these elements gives you a clearer picture of a

cryptocurrency‘s potential. It‘s about looking beyond the hype and

evaluating the substance of the project.

Market dynamics and competitive landscape

Understanding the market dynamics and how a cryptocurrency stacks

up against its competitors is key to a thorough fundamental analysis.

Here‘s what to focus on:

 Demand and adoption rates: It‘s crucial to gauge both the current and

future demand for a cryptocurrency. Are people actually using it? Look

at user adoption rates and transaction volumes. Projected demand is

equally important. Does the cryptocurrency have the potential to attract

more users? What factors might drive its adoption in the future?

 Competitor analysis: How does the cryptocurrency fare against similar

projects? Analyse its position in the market compared to its competitors.

Consider factors like technology, use case, market cap, and user base.

Is it a leader, a follower, or an innovator in its niche?

 Regulatory environment: The regulatory landscape can significantly

impact a cryptocurrency‘s success. What‘s the current regulatory stance

in key markets? Also, consider potential future regulations. Are there

upcoming changes that might affect the cryptocurrency? Regulatory

friendliness or hurdles could make or break its wider adoption.

By evaluating these aspects, you can get a better sense of the

cryptocurrency‘s place in the market and its prospects amidst the

broader economic and regulatory environment.

Economic factors
In the world of cryptocurrency, economic factors play a crucial role in

determining a project‘s viability and future success. Let‘s delve into the

key economic aspects to consider:

 Tokenomics: Tokenomics is essentially the economics of the token.

How is the supply managed? Is there a cap on the total number of

tokens, or is it inflationary? Understand the distribution strategy of the

tokens. Who holds them, and how are they distributed among

developers, the company, and the public? The distribution impacts the

token‘s value and potential for manipulation. Assess the mechanisms

for inflation or deflation. Does the token have a burning mechanism, or

is there a staking system that can affect the supply?

 Funding and financial health: Investigate how the project is funded.

Does it have solid backing from reputable investors or organisations?

Initial funding sources can indicate the project‘s credibility and the

confidence of savvy investors in its potential. Look into the project‘s

revenue streams. How does the project plan to generate income, and

what‘s its model for financial sustainability? A project without a clear

path to revenue may struggle in the long run.

Analysing these economic factors gives you insight into the token‘s

long-term viability, helping you decide if it‘s a smart investment.

Community and ecosystem

The community and ecosystem surrounding a cryptocurrency are vital

indicators of its health and potential for growth. Here‘s what to consider:

 Community engagement and sentiment: A large, active community

often suggests a high level of interest and engagement. Assess the

overall sentiment within the community. Are members positive and

supportive, or is there a lot of negativity and scepticism? Community

sentiment can significantly influence the success and adoption of a

cryptocurrency. Look at community channels like forums, social media,

and blogs. How active are these platforms? Do the developers interact

with the community?

 Partnerships and collaborations: Partnerships can play a crucial role

in the growth and adoption of a cryptocurrency. What companies or

organisations is the project collaborating with? Evaluate the impact of

these partnerships. Are they with well-established and reputable

entities? Consider the significance of these collaborations in the context

of the project‘s goals. Do they align with the project‘s roadmap and

objectives?

Understanding the dynamics of the community and the nature of

partnerships can provide valuable insights into the cryptocurrency‘s

potential for success and long-term sustainability.

Risks and challenges

When exploring fundamental analysis in crypto trading, remember that

every investment carries risks. Identifying and understanding these

pitfalls is crucial for informed decisions. Here are key risks to consider:

Technological risks:

 Security vulnerabilities: Cryptocurrencies rely on blockchain

technology, which can be vulnerable to hacking and security breaches.

 Scalability issues: Some blockchain networks face challenges in

handling a large number of transactions, leading to slow processing

times and high fees.

 Market risks:

 Volatility: Cryptocurrency markets are known for their extreme price

volatility. Be prepared for price fluctuations that can happen suddenly,

affecting your investment‘s value.

 Liquidity: Some cryptocurrencies have lower liquidity, making it

challenging to buy or sell large amounts without significantly impacting

the market price.

 Market sentiment: Be mindful of social media, news, and rumours—

they can swiftly influence cryptocurrency prices through shifts in investor

sentiment.

Regulatory risks:

 Regulatory changes: Be aware that evolving regulations can affect

cryptocurrency legality and access globally and in your region.

 Taxation: Cryptocurrency transactions have varying tax implications by

country; non-compliance can lead to legal and financial repercussions.

 Compliance and security: Prioritise regulatory compliance and

KYC/AML requirements for cryptocurrency projects and exchanges to

avoid potential legal troubles. If you‘re looking for a secure crypto

exchange, Kriptomat is a regulatory compliant platform enabling safe

trading. Learn how to get started with Kriptomat in our step-by-step

tutorial ―Getting Started with Kriptomat‖.

 Adoption and competitive risks:

 Competitive landscape: The crypto market is competitive, with new

projects emerging. Assess your chosen cryptocurrency‘s

competitiveness and its unique value.

 Adoption challenges: A cryptocurrency‘s success relies on its adoption

and real-world use cases. Assess the project‘s ability to gain traction

and overcome potential adoption barriers.

 Partnership dependency: Recognize the impact of partnership

reliance; partnerships can change or dissolve, influencing the project‘s

course.

While fundamental analysis offers valuable insights, it‘s vital to be aware

of investment risks. Diversify, stay informed, and research thoroughly to

make informed decisions in the unpredictable crypto market. Invest only

what you can afford to lose.

Elevate your trading with Kriptomat’s tools

Once you‘ve done your fundamental research and feel ready to trade,

Kriptomat offers a suite of advanced tools to make your trading

seamless:

 Access a diverse range of cryptocurrencies to diversify your portfolio.

 Use sophisticated charting tools for detailed technical analysis. Discover

more in our guide ―How to Use Kriptomat‘s Advanced Price Charts?‖

 Stay informed of market movements with real-time data, Watchlist,

and Price alerts.

 Implement strategies effortlessly with features like Recurring Buy and

Automated Buy/Sell. Learn their usage in our guides ―What is

Automated Buy & Sell? How Do I Use It?‖ and ―What is Recurring Buy

and how does it work?‖

 Refine your approach with Kriptomat‘s Portfolio Analytics, offering

detailed insights into your investment performance. Check out ―What is

Portfolio Analytics and how to use it?‖ for more.

 Benefit from comprehensive tutorials and responsive customer support

for a seamless trading experience.

To sum up
When trading crypto, making informed investment decisions is crucial.

Relying solely on market trends and quick gains can be risky. That‘s

where fundamental analysis comes in.

Fundamental analysis empowers you to look deeper, assessing a

cryptocurrency‘s technology, team, demand, and real-world potential.

Understanding these core factors helps you make educated investment

choices.

Remember, knowledge is your best tool. We invite you to continue

exploring the educational content on Kriptomat‘s platform. In

addition, sign up for Kriptomat to access a user-friendly, secure and

compliant platform for managing your cryptocurrency investments.

With fundamental analysis and Kriptomat as your allies, you‘re well-

prepared for the dynamic world of crypto trading. Happy investing!

The Three Types of

Cryptocurrency

Analysis: Fundamental,

Technical and On-Chain

Analysis
Learning about the fundamentals of cryptocurrency trading and

investing may be one of the most valuable things you can do. As Su

Zhu, the CEO of one of the largest crypto hedge funds, Three Arrows

Capital, said, ―If you don't understand crypto and refuse to learn, it's

gonna be a tough century for you.‖

We‘re seeing more and more traders and investors applying these

methods of analysis to the space. Bullish investment reports using

fundamental analysis have been published by Goldman Sachs, JP

Morgan and Morgan Stanley. And models built by on-chain analysts

such as the Stock-to-Flow, have given bitcoin‘s price a prediction of

AU$1.9 million by 2025.

While many investors choose to ‗hodl‘ their coins, the co-founder of

Multicoin Capital, Tushar Jain, recognises that, ―The crypto markets are
the least efficient markets I‘ve ever seen in my life, and that means

active management has an opportunity to shine.‖

With that in mind, let‘s explore the three most popular types of

cryptocurrency analysis; fundamental, technical and on-chain analysis.

Let‘s start with the fundamentals.

Contents
 Fundamental analysis for cryptocurrency

 Technical analysis for cryptocurrency

 On-chain analysis for cryptocurrency

 Combining all three methods of analysis for successful

cryptocurrency trading

1. Fundamental analysis for cryptocurrency

Fundamental analysis takes a deep dive into all the information

available about a cryptocurrency. It uses a mix of both

quantitative financial metrics and qualitative measures. Ultimately, the

aim of fundamental analysis is to determine a cryptocurrency‘s intrinsic

price.

When you then compare that fundamental value to the current market

price, you can see whether the crypto asset is either undervalued or

overvalued. An undervalued asset can represent a buying opportunity,

while an overvalued asset can signal it‘s time to take profits.\

Consider a meme coin like Dogecoin, does it have any intrinsic value?

The technology entrepreneur Mark Cuban doesn‘t think

so, saying ―That‘s not to say [dogecoin] has any intrinsic value. It

doesn‘t.‖

However, when we apply the tools of fundamental analysis, we are

more informed. So, what is Dogecoin? Firstly, we can see it lacks many

fundamental value propositions like a roadmap, developer team, and

even a whitepaper.

Still, it does have a market cap worth tens of billions, hundreds of

millions in 24-hour volume, and is one of the most known of any

cryptocurrency. It even proved a use case when Mark Cuban‘s NBA

team, the Dallas Mavericks, accepted it as a payment method for

tickets. Clearly, it has an intrinsic value.

While the fundamental analysis may indicate that at $1 Dogecoin would

be overvalued, at 5 cents it could be a great buy.

Key information to inform fundamental analysis:

 Market cap

 Volume

 Tokenomics

 Total value locked

 Roadmap

 Team members

 Community size and engagement

 Rate of network growth

 Rate of adoption

 Whitepaper

 Use case

2. Technical analysis for cryptocurrency

Technical analysis looks at past price movements in an attempt to

determine which way the market is likely to move next. Is it going up?

Down? Sideways? Technical analysis draws on a number of statistical

indicators and patterns to determine the probability of each scenario.

While traders use statistical metrics, they rely heavily on visual charts to

help identify key signals, such as support and resistance. Ultimately,

technical analysis is used to find buy and sell signals.

It‘s important to note, traders using technical analysis never expect to

be right all of the time. In fact, a trader that‘s only correct 55% of the

time can still be incredibly profitable. To manage risks for the times

when the market moves contrary to what their indicators predicted, they

use risk management practices, such as setting auto sells and investing

only a portion of their holdings on a single trade.

For example, consider the bitcoin chart above taken

from TradingView in late July of 2021. The purple line in the lower third
is the Relative Strength Index (RSI), which is an indicator that evaluates

overbought or oversold conditions. In our market updates, Cointree‘s

Technical Trading Analysts identified that it was entering oversold

territory and we may see some profit taking.

Next, our analyst noted the 50-day moving average was moving

upwards, confirming what looked like a bullish trend. In summary, our

analysts used technical trading tools to predict, that while we may see a

short drop in price in the short term, the market would then most likely

keep pushing higher. As you may remember, that‘s exactly what

happened.

Popular tools of fundamental analysis:

 Moving average convergence divergence (MACD)

 Relative Strength Index (RSI)

 Bitcoin price Simple Moving average (SMA)

 Moving Average (50,200) Crossover

 On-balance volume (OBV)

3. On-chain analysis for cryptocurrency

On-chain analysis looks at the public data on the blockchain. It‘s an

emerging field that‘s unique to the cryptocurrency space, with traders

using it to better predict market moves and gauge market sentiment.

Ultimately, traders use on-chain analysis to identify the reasons different

market participants are buying and selling, such as miners selling to pay

their bills or hedge funds taking profits.

With on-chain analysis, traders look to see how different market

participants are behaving, such as institutional investors, exchanges,

miners and retail traders. They use a range of signals, including wallet

balances, coin dormancy and transaction volume.

As we can see on the chart above from Glassnode, the percentage of

bitcoins held by miners and large holders has decreased significantly,

while the number of coins held by everyday investors has increased

substantially. This is an important metric as it shows that the network

continues to become more and more decentralised over time.

Moreover, the above chart can be used by traders to see how much

influence that different market participants have over the price. As the

co-founder and CTO of GlassNode, Rafael Schultzre-Kraft, reported,

―We have seen a significant increase of bitcoin whales (and their

supply) since 2020. This suggests that institutional investors, funds,

family offices, and other [high net worth individuals] HNWI have been

entering the space.‖

Insightful on-chain indicators include :

 Number of active addresses

 Number of transactions

 On-chain volume

 Hash rate

 Miner revenue

 Total value locked (TVL)

 Market value to realised value (MVRV)

 Network value to transaction (NVT)

 Realised cap

Combining all three methods of analysis for

successful cryptocurrency trading

While each of these methods of analysis is valuable on their own,

they‘re even more powerful when used together. Alone, a single metric

may not be instructive. But like a thousand tiny brush strokes,

combining all of your analysis methods can paint a compelling picture of

the market.

Of course, you don‘t need all three to align to make a trade. Maintaining

your risk management practices and allocating appropriately lets you

move in and out of a position as the market changes.

As we covered in our bitcoin success stories, the successful

cryptocurrency hedge fund Three Arrows Capital mentioned in the intro

were not always billionaire investors. They launched their fund from a

kitchen table in their apartment using their own savings. Now, there‘s

multiple Lamborghinis sitting in front of their own trading office.

Having traded successfully for almost a decade, it‘s clear that their

fortune was built on careful analysis and skilled trading rather than luck.

And tellingly, they‘ve significantly outperformed the hodlers.

How To Evaluate Cryptocurrency
CLOSE

How Do I Analyze Cryptocurrency?

To evaluate a cryptocurrency, you should always read the whitepaper to learn

about it. Most reputable projects also have a vision for the problem they

address, a roadmap, an involved community, a team of developers with notable

experiences, and a method for using the cryptocurrency within the system.

It's also important to be aware of scamming attempts—which learning how to

analyze crypto can also teach you to do. Here are the fundamentals you should

look for when evaluating a cryptocurrency.

KEY TAKEAWAYS

 Investing in cryptocurrency requires a basic understanding of what it is.

 When choosing a crypto, you should learn about the project and its

vision.

 Cryptocurrency analysis is similar to fundamental analysis of stocks.

 If a project makes promises but doesn't discuss how it solves a problem,

it might not be a good investment.

 It's important to learn how to avoid cryptocurrency scams when you're

choosing a cryptocurrency.

1. Review the White Paper

Most crypto projects provide a white paper, which helps define the objectives

and technical details about the blockchain and its cryptocurrency's role. True
white papers contain terms and language data scientists, programmers, and

developers understand. For instance, Solana has a whitepaper that describes

how the blockchain will work and what the token is used for.1

Cybertruck's white paper, on the other hand, does not—it is a flashy website

that talks about the potential for building a community. A disclaimer at the

bottom of the webpage states, "$CYBERTRUCK is a meme coin with no

intrinsic value or expectation of financial return. There is no formal team or

roadmap. The coin is completely useless."2

An example of a true cryptocurrency scam is Bananacoin. This now-defunct

cryptocurrency was an initial coin offering that offered tokens in exchange for

money. The project claimed it would use the funding to maintain a banana farm

in Laos and that the coins could be exchanged for equal-value Laotian bananas

in the future.3

A cryptocurrency with utility or a reason to exist should have a white paper that

clearly defines the project's goals, how it will achieve them, and how the

cryptocurrency will function. Legitimate white papers define a problem being

solved with the blockchain and token, and this problem and solution should be

crystal clear to investors.

2. Research the Team

Cryptocurrencies are typically created by a team of founders and software

developers who help create the solution to a problem. To better understand

how a project could perform, you should research the professional experience

of the project team.

This may include reviewing LinkedIn profiles to learn about the professional

background of any of the technical or leadership staff and the previous projects

that the team members have launched. Also, the ―About‖ page on any

cryptocurrency‘s website should clearly articulate who is helping build the

project and what their expertise entails.

A red flag would be a team of anonymous founders or developers who don‘t

reveal their identity publicly or an inexperienced team that has not built or

scaled any projects in the past.

3. Learn About the Leadership

Crypto projects with the potential to make a difference have a clearly defined

executive team that handles its execution, financials, and marketing. Learning

more about who is leading a cryptocurrency team can give insight into the

probability of success for a project.

Here are a few questions to ask when researching a crypto project's leadership:

 Do they have a history of successful leadership positions?

 Are they reputable/well-known leaders?

 Do they have a history in the crypto industry? Is it good or bad?

 Are they public-facing or anonymous?

While some projects with anonymous founders, such as Bitcoin, are launched

with good intentions, others are not. A cryptocurrency is likely not legitimate if

its leadership is sketchy or if it avoids important topics.

4. Get to Know the Community

Most cryptocurrencies are community-driven projects that require a strong,

supportive community to grow. Learning about a cryptocurrency community can

help you gauge whether a project will succeed or is pure hype and speculation.

Joining the community's Discord, Telegram, or other social media channel can

help you learn more about it, as well as get your questions about the project

itself answered. If a large community base is well-organized and frequently

promotes the project, it could be a sign that a cryptocurrency has the potential

to grow. Communities should be discussing issues with the blockchain and

improvements that could be made or have other similar discussions—in

addition to the regular conversations that might occur between people with

similar interests. If all you find is hype and pumping, it is a good bet that the

cryptocurrency project is not legitimate.

5. Understand the Technology

Cryptocurrencies are a new concept built on distributed systems that have existed

for decades. The original intent behind them was to remove human involvement

(and thus corruption, mistakes, and third-party profits) from financial systems. If

you can gain even a partial understanding of how blockchains work and can be

used to solve problems, you'll have the upper hand in deciding whether a

cryptocurrency is worth investing in.

However, you don't need to know how to program or maintain a blockchain—

but learning what a token is, what the blockchain does, how it is maintained,

what is stored on a blockchain, and how the blockchain is interacted with by

users is essential for would-be investors. Otherwise, you're only speculating on

prices and hoping the coin becomes popular.

6. Understand the Vision

Cryptocurrency creators should have a clear vision of their goals, with a road

map that estimates how they will get there. This should be readily available in

the white paper and on its website. The vision of a crypto project should give

enough details for you to understand what problems it is solving and the

potential user base.

For example, if a website has statements like ―cryptocurrency is the future‖ but

does not define or articulate a clear vision for how the cryptocurrency solves a

specific user problem for the future, it is a red flag.

7. Review the Road Map

The road map for a cryptocurrency project is a timeline of events that shows its

expected progress. Typically shown on a line graph, the road map should have

clear and concise milestones broken down on a quarterly basis, all moving the

project toward a predefined set of goals.

The road map may be available in the white paper, though most crypto project

timelines are ever-changing and are listed on a website. If there is no defined

road map, or if the milestones are too generic (or based on money raised or

earned), it is a red flag.

8. Learn the Tokenomics

The term "tokenomics" refers to the distribution, circulation, and total supply of

a given cryptocurrency. This is important, as it affects the overall price of a

cryptocurrency over time. Similar to shares of stock in a publicly traded

company, the price of a given cryptocurrency reflects supply and demand. The

more shares there are the more demand there needs to be to increase the

price.

Here are three important data points to review before investing in any

cryptocurrency:

 Circulating supply: The cryptocurrency currently in the market

 Total supply: The total amount of cryptocurrency issued, including those

that have been burned (removed from circulation)

 Maximum supply: The maximum amount of tokens that will ever be

issued

All three of these statistics can greatly affect the price of a given

cryptocurrency, so understanding supply is essential for cryptocurrency

investors.

Some cryptocurrency projects use uneven token distribution methods to try to

influence prices. Reviewing the token unlock schedule can help you understand

how the tokens will be distributed and to whom they will go. Projects that give

the founders a large portion of tokens at release should be viewed skeptically.

9. Review the Data

Cryptocurrency prices are known to swing up and down wildly. One reason for

these wild swings is that investors do not want to be left out of the next big price
jump, nor do they want to be left holding a cryptocurrency that has dropped

significantly in price (unless they are very bullish about it).

Users influence prices as well, paying for cryptocurrency at the going market

rate, but this activity is much less significant an influence than investing and

trading.

Cryptocurrency prices also react, sometimes explosively, to news and events

because of investor anticipation. For example, Bitcoin halvings are believed by

many investors to be events that increase its price because there is a reduction

in the rate at which new coins are introduced (future supply). However, what's

really causing the price changes is sentiment—because of past performance

after halvings, many believe price increases will continue. This is pure

speculation, because many external factors affect prices.

The price of the cryptocurrency you're reviewing should follow the same trends

other cryptocurrencies have because traders and investors will generally treat

them the same as they do other investments. Prices that seem out of place

should raise an eyebrow.

How to Avoid Cryptocurrency Scams

Because most cryptocurrencies have market value, they have naturally become

a tool used by scammers and thieves. There are many easily

identified cryptocurrency scams, but some are very difficult to spot.

The analysis steps listed above are the best place to start when trying to

determine whether a cryptocurrency is legitimate. Here are some other tips for

staying ahead of scammers and thieves.

Never Share Your Information

Legitimate users, developers, and exchanges will not contact you for

usernames, passwords, and pins. Regulated exchanges offer private key

storage solutions, so you might be asked to transfer your keys to them if you

choose their storage, but most entities will not ask you for your keys or

information.

Use Regulated and Reputable Exchanges

Decentralized cryptocurrency exchanges are popular because they provide a

connection to others without asking for personal information—but this adds risk.

Centralized and regulated exchanges verify user identities and offer more

protection on their platforms. They are not 100% safe, but they are more safe

than decentralized exchanges, at least for most users. These

exchanges generally vet the cryptocurrencies they list.

Beware of Social Media

Social media is a favorite tool for scammers because they can quickly and

easily target the most people. If you're contacted by anyone about new

cryptocurrencies or services related to them, it's best to avoid them. Exchanges

and legitimate users will not contact you via social media.

Other Important Tips

 Avoid Free Money: Nothing is free, so it's best to avoid cryptocurrency

teams giving away their tokens.

 Guaranteed Returns: No one can guarantee returns on an investment.

This should be a clear indicator of a scam.

  Verify the Apps: Applications on app stores can be fake or include

malware, so it's best to ensure you use apps that have been thoroughly

vetted and reviewed. Also, only download apps from sources you trust.

 Avoid Giveaways: There are some valid reasons for cryptocurrency

giveaways, such as a hard fork into a new blockchain and token. But most

giveaways are schemes to draw your interest and money.

 Avoid Initial Coin Offerings: In most developed countries, initial coin

offerings (ICOs) are regulated and must be registered with the appropriate

authority. If they are not, it's best to avoid them.

 Cold Calls: Legitimate cryptocurrency businesses or developers will not

call you to solicit your involvement, money, or private keys. If you do

receive a call like this, simply hang up and contact the entity where you

purchased or stored your cryptocurrency.

How Do You Analyze Cryptocurrency?

The best way to analyze cryptocurrency is to become familiar with blockchain

and cryptocurrency by reading white papers and learning about the developers

and how they plan to address a problem using the cryptocurrency.

Which Analysis Is Best for Cryptocurrency?

Fundamental analysis is the best way to find a cryptocurrency worth investing

in. Cryptocurrency pricing trends and great graphics do not show valuation;

they only show price data.

What Is the Best Crypto Market Analysis Tool?

The best crypto market analysis tool is publicly-available (and reputable)

information you gather. You should get a bird's eye view of the technology and

development process behind them, then use that knowledge to analyze the

market.

The Bottom Line

A cryptocurrency analysis involves examining all the available information

about a digital asset. Understanding and researching the topic helps you to

determine why it's priced the way it is and whether it is worth investing in.

The comments, opinions, and analyses expressed on Investopedia are for

informational purposes only. Read our warranty and liability disclaimer for more

info. As of the date this article was written, the author does not own

cryptocurrency.
What is Fundamental Analysis in Crypto

Trading?
11 min of reading ▪ by La Rédaction C.

Learn

Fundamental analysis plays a crucial role in cryptocurrency trading, offering

investors insight into the intrinsic value and long-term potential of digital assets. In

a market characterized by volatility and constant innovation, mastering this

analytical approach distinguishes solid investment opportunities from high risks.

This article aims to demystify fundamental analysis in crypto trading by addressing

its basic principles, key indicators to watch, strategies for effective analysis, and

common pitfalls to avoid, thus providing a practical guide for investors aspiring to

navigate successfully in this complex universe.

Summary

Fundamental Analysis: Definition and Principles

Fundamental analysis is a method of evaluating assets, including

cryptocurrencies, based on external and internal factors to predict future price

movements. Unlike technical analysis, which focuses on price charts and trading

patterns, fundamental analysis examines economic, financial, and other relevant

data to assess the real value of a currency.

The principles of fundamental analysis in crypto include evaluating the strength of

the project, the robustness and stability of the blockchain network, strategic

partnerships, and growth prospects. Investors use this method to determine if a

cryptocurrency is undervalued or overvalued by the market.

Key Indicators in Cryptocurrency Fundamental Analysis

Fundamental analysis in cryptocurrency trading relies on a deep understanding of

various key indicators. These indicators provide essential information about the

health, performance, and potential of a digital currency.

Market Capitalization

The market capitalization of a cryptocurrency is a crucial indicator to evaluate its

size and stability in the market. It is calculated by multiplying the current price of

the currency by the total number of coins in circulation. A high market capitalization

generally indicates a well-established and widely accepted currency, which may

signify greater stability and less volatility.

Firstly, a significant market capitalization may indicate increased investor

confidence. Currencies with a large market cap are often considered ―safe bets‖
due to their recognition and adoption in the market. Secondly, market capitalization

can reflect the maturity of a cryptocurrency project. Older and well-established

projects tend to have a higher market capitalization. Finally, it is important to

consider market capitalization in the context of the overall cryptocurrency market. A

currency with a large market share may be less susceptible to manipulation by

individual actors.

Trading Volume

Trading volume is another fundamental indicator in cryptocurrency analysis. It

represents the total number of coins traded over a given period and is a good

indicator of liquidity and investor interest in a specific currency. High volume

suggests increased interest and strong liquidity, which is essential for investors

looking to enter or exit positions without significantly affecting the currency‘s price.

Trading volume can also provide insights into market strength. High and increasing

volume may indicate an upward trend, while decreasing volume may signal a lack

of interest or a downward trend. Additionally, it is important to compare trading

volume with price movements. For example, a price increase accompanied by high

volume can confirm the strength of an upward trend. Finally, investors should be

vigilant against abnormally high volumes, which may sometimes indicate market

manipulation or ―pump and dump‖ schemes.

Innovations and Technological Developments

Innovations and technological developments are fundamental factors for evaluating

the long-term potential of a cryptocurrency. Projects that constantly innovate and

improve their blockchain technology are more likely to remain relevant and
competitive in the market. Technological updates, security enhancements, and

feature expansions are signs of a healthy and dynamic project.

Technological innovation can take various forms. For example, the implementation

of new features such as smart contracts or scalability solutions can significantly

increase the perceived value of a currency. Additionally, strategic partnerships with

other companies or blockchain projects can be a sign of growth and expansion.

Finally, it is important to monitor the developer community around a cryptocurrency.

An active and engaged community can be a strong indicator of ongoing support

and innovation for the project.

Revenue

from Cryptocurrency Trading

How to Conduct Effective Fundamental Analysis?

Fundamental analysis is a cornerstone for cryptocurrency investors seeking to

understand the intrinsic value of a digital asset. This approach requires a thorough
evaluation of various factors that influence the value of a currency. Here are the

key steps to conducting effective fundamental analysis.

Understand the Project and its Vision

The first step in fundamental analysis is to deeply understand the project behind

the cryptocurrency. This involves evaluating the vision, mission, and goals of the

project. It is important to determine if the project addresses a real need in the

market and if it has the potential to disrupt or improve an existing sector.

It is also important to examine the team behind the project. An experienced and

credible team can increase confidence in the project‘s ability to achieve its goals.

Additionally, the project‘s roadmap and milestones achieved are indicators of

progress and long-term viability. Finally, it is essential to understand the

cryptocurrency‘s unique value proposition and how it differentiates itself from other

assets in the market.

Analyze Market Data and Financial Indicators

Once you have a solid understanding of the project, the next step is to analyze

market data and financial indicators. This includes studying market capitalization,

which can provide an indication of the project‘s relative size in the cryptocurrency

ecosystem. Another key indicator is trading volume, which reflects market interest

and liquidity for the currency.

It is also important to examine the project‘s funding sources and its business

model. This may include analyzing token sales, strategic partnerships, and revenue

sources. Additionally, it is essential to monitor price fluctuations and market trends

to understand investor sentiment. Finally, comparing the cryptocurrency‘s

performance with other similar assets can provide valuable insights into its position

in the market.

Evaluate External Factors and Market Trends

The final step in fundamental analysis is to evaluate external factors and market

trends that may influence the cryptocurrency‘s value. This includes monitoring

news and events that may impact the cryptocurrency market, such as regulatory

changes, technological developments, and global economic movements.

It is also important to understand the impact of social media and public opinion on

cryptocurrency prices. Major announcements, partnerships, and project

updates can cause significant market reactions. Finally, it is crucial to stay informed

about overall cryptocurrency market trends, including market cycles, bullish and

bearish trends, and macroeconomic factors that may affect the entire industry.

Common Mistakes to Avoid in Fundamental Analysis

Fundamental analysis is a powerful tool for cryptocurrency investors, but it can be

compromised by certain common mistakes. Understanding and avoiding these

pitfalls can greatly improve the quality of analysis and, consequently, investment

decisions.

Relying too much on speculation and rumors

A common mistake in fundamental analysis is to rely excessively on speculation

and rumors. While forums and social media can be sources of valuable information,

they are often filled with unfounded speculation and rumors that can be misleading.

It is important to distinguish between facts and opinions and conjecture.

Firstly, it is important to verify information from reliable and official sources. This

includes press releases, financial reports, and official announcements from

cryptocurrency projects. Secondly, it is necessary to develop a critical approach

and question the information received. Finally, it is advisable not to make

investment decisions based solely on popular trends or ―hypes‖ without a solid

fundamental analysis.

Neglecting macroeconomic factors and market trends

Another common mistake is neglecting macroeconomic factors and the overall

market trends. Fundamental analysis goes beyond studying the individual

characteristics of a cryptocurrency but must also take into account the broader

economic and financial environment. It is important to monitor global economic

conditions, such as interest rates, monetary policies, and economic trends, as they

can have a significant impact on the cryptocurrency market.

Additionally, it is necessary to stay informed about regulations and government

policies regarding cryptocurrencies, as they can affect the perception and adoption

of digital currencies. Finally, it is important to follow cryptocurrency market trends,

including market cycles and long-term price movements, to better understand the

context in which a specific currency operates.

Underestimating the importance of diversification

Underestimating the importance of diversification is a common mistake in

fundamental analysis. Putting all your eggs in one basket can be risky, especially in

a market as volatile as cryptocurrencies. Diversification is a key strategy for risk

management.

Firstly, it is advisable to diversify investments across different cryptocurrencies and

asset classes. This can help reduce overall risk and mitigate the impact of negative

price movements in a specific currency. Secondly, it is important to consider

diversification within the cryptocurrency ecosystem by investing in projects with

different use cases and growth potentials. Finally, it is important to regularly

reassess and adjust the portfolio based on market changes and investment

objectives.

Conclusion

Fundamental analysis allows for a thorough understanding of the intrinsic value of

digital assets. By focusing on key principles, carefully evaluating market indicators,

and avoiding common mistakes, investors can make more informed and strategic

decisions. The importance of this method lies in its ability to provide a

comprehensive perspective, combining technical data with economic factors and

market trends, for a more balanced and thoughtful investment approach in the

dynamic universe of cryptocurrencies.

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 La Rédaction C.

The Cointribune editorial team unites its voices to address topics related to

cryptocurrencies, investment, the metaverse, and NFTs, while striving to answer

your questions as best as possible.

 How to evaluate any crypto project using

fundamental analysis

Different from traditional markets, the crypto market has its own set of key questions to

consider when analyzing a project and its assets.

MARKET ANALYSIS

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
Fundamental analysis is the process of finding the intrinsic value of an asset, with the goal

of determining whether the asset is overvalued or undervalued. That information can then

be leveraged along with technical analysis to decide whether to invest in or trade an asset.

In cryptocurrency fundamental analysis, the approach is somewhat different than that

typically used to evaluate legacy market assets. Crypto assets don’t have the historical data

required, as there’s usually no history of earnings reports or profit and loss statements.

For cryptocurrency analysis, all the available information on the asset needs to be sought

out through research that includes investigating its use cases, its network, the team behind

the project, vesting schedules — the list goes on. By looking at the right set of factors,

traders can determine the fundamental value of an underlying project before investing.

Here are the 10 steps found to be most useful:

1. Read the white paper

Especially for long-term, buy-and-hold investing, it is critical to read a token’s white paper.

This is the document that gives an intentional, detailed overview of a project. A good

white paper explains:

 The project’s goals

 The use cases and distribution

 The team’s vision

 The technology behind the token

  Plans for upgrades and new features

 How the token provides value to users

2. Assess the claims of the white paper

Be skeptical because the people behind projects can bend, or even break, the truth.

This happens more often than most realize. For example, Michael Alan Stollery, the

founder and CEO of Titanium Blockchain Infrastructure Services, raised $21 million in an

initial coin offering (ICO).

He later admitted to falsifying parts of the project’s white paper.

It’s important to ask some hard questions and get complete answers before putting one’s

money into a project.

Some questions to consider:

 Are the tokens really distributed the way they promise?

 Are they meeting the road map expectations?

 Are they inventing a problem just to solve it?

 What are other people saying about it?

 Are there any red flags?

 Do the goals seem realistic?

3. Look at competitors

According to some industry sources, nearly 40% of cryptocurrencies that were listed in

2021 no longer exist.

That serves as an important truth investors need to take into account: A lot of projects —

close to half, and it could be even more — fail, and fail miserably.

Graph of

deactivated cryptocurrencies on CoinGecko, by year listed. Source: CoinGecko

Scrutinizing a project’s white paper reveals the use case the crypto asset is targeting and

the problem it is trying to solve. One should then consider whether or not that use case is,

in fact, viable and wanted.

Furthermore, it’s important to identify competing projects and examine existing projects

this new one might replace, if successful. The bottom line: Smart investors are looking to

see if this project is better than others or not.

4. Look at the team behind the project

A project is only as good as the team behind it.

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The people offering the project must have precisely the right skills to make their project

work. The white paper should have information about each member of the team, but

doing some independent research can be helpful too.

Some questions to consider about the people behind any project:

 Have they worked on other reputable, successful projects in the past?

 What are their credentials? Are they experienced?

 Are they reputable members of the crypto community and blockchain

ecosystem?

 Have they been involved in any questionable projects or scams?

What if there is no team? Then look to the developer community.

Find out if the project has a public GitHub. Check to see the number of contributors and

activity levels. The more consistent development activity on a project, the better.

5. Look at on-chain metrics

On-chain metrics are available by looking at data on the blockchain.

Exchange inflow and outflow metrics. Source: Cointelegraph Markets Pro

The data can be pulled from websites or APIs — such as on-chain analysis, data charts and

project reports — specifically designed to inform investment decisions.

Some of the data worth considering:

 Transaction count: a measure of activity taking place on a network. The more

activity, the better.

 Transaction value: how much value has been transacted within a period of time.

The higher this number is, the better.

 Active addresses: how many blockchain addresses are active at any point in

time. Again, the more active addresses, the better.

 Fees paid: how the demand for block space is growing or shrinking for a token

based on fees.
  Hash rate: a measure of the network health in proof-of-work cryptocurrencies.

The higher the hash rate, the more difficult it is to successfully mount a 51%

attack.

 Staking: the amount staked at a given time shows the interest level, or lack of it,

in the project.

6. Look at the tokenomics

Invest in projects that create useful tokens; otherwise, the token may not have utility in the

marketplace.

In addition, if the token is useful, it still needs to be determined how the market will

embrace it, thereby making sense of the token’s price movements and allowing investors

profit opportunities on an ongoing basis.

Some questions to consider:

  Is the token useful?

 How do people get the token?

 What is the inflation or deflation rate?

 Was it an ICO asset?

7. Market cap, trading volume and liquidity

Some of the most important analysis is about the financial metrics of the token associated

with a project, including:

 Market capitalization: the network’s value represented by the hypothetical cost

to buy every unit of the asset. The ―market cap‖ gives insight into the growth

potential of the network, and it is calculated by multiplying the circulating

supply by the current price.

 Trading volume: the amount of value that was traded in a certain amount of

time (daily, weekly, monthly). It points to whether a token has enough liquidity.

 Liquidity: an indicator that measures how easily a token can be bought and sold.

The more liquid a token is, the easier it is to sell it at its current trading price.

8. Community

When a community is behind a project, it tends to help the project’s token appreciate in

value.
Social media, for instance, can have a significant impact on a crypto asset’s price action.

Memecoins such as Dogecoin

DOGE

$0.11

and Shiba Inu

SHIB

$0.000015

skyrocketed in price due, in part, to social media excitement.

Just recently, Solana’s BONK token got a huge price boost as social media activity pushed

interest levels in the asset to new highs.

NewsQuakes™ for BONK as social media excitement ramped up. Source: Cointelegraph

Markets Pro

A community that is backing a coin is a powerful catalyst, so here are a few questions to

consider:
  Is the community active and excited?

 Are there a lot of shilling accounts?

 Is sentiment good?

 Are there plenty of developers?

Remember, a token’s price goes up only if there is interest and market action. The more

people talk about and invest in a token, the more likely its price will appreciate.

9. Marketing

Currently, there are about 21,910 cryptocurrencies investors can choose from — that’s a

lot of competition!

The team behind a project needs to actively market its token in order to differentiate itself

from the crowd, and industry insiders are saying that it is now harder than ever to stand

out.

In addition, with the continual advent of new tokens on the market, established

cryptocurrencies are struggling to retain market share.

So, the team behind the project must actively build brand awareness, get customers and

retain customers to improve sales and profits.

Some questions to consider before investing in a project:

 Is the core team marketing the product well?

  Do they have a dedicated marketing team?

 Are they increasing market share or not?

10. If the core product is available, test it out

This one might be a little tough for someone who is just looking to invest in the

underlying token of a project. However, let’s say one is considering an investment in

Ethereum’s Ether

ETH

$3,151

Since Ethereum is a decentralized global software platform, a functional, secured digital

network technology would demonstrate for certain how the platform actually works.

Knowing this could definitely help inform a potential investing decision.

After all, if the platform is hard to use, time-consuming or otherwise creates more

problems than it solves, it may be wise to steer clear of investing in such a platform until

these issues are addressed.

So, there it is — 10 steps for sound fundamental analysis to help evaluate the profit

potential of any asset before any investing or trading.

See how Cointelegraph Markets Pro delivers market-moving data before this

information becomes public knowledge.

Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized

investment advice. Cryptocurrencies are volatile investments and carry significant risk including the risk of permanent and total

loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise

specified. Live-tested strategies are not recommendations. Consult your financial adviser before making financial decisions.

All ROIs quoted are accurate as of Feb. 16, 2023.

Learn Crypto: Trading

Strategies for

Beginners
Crypto strategies & fundamentals for beginners: types, analysis, risks &

more.

Register Now
Published in: One Trading · 5 min read

Introduction
Crypto-assets have taken the financial world by storm, offering relatively new

investment opportunities and revolutionizing how we think about money and

confirm transactions.

However, entering this market without a well-thought-out plan can be

overwhelming. Hence, it is crucial to learn the basics.

This article explores crypto fundamentals, including the different crypto trading

strategies and the role of crypto exchanges in protecting beginners.

1. Understanding Different

Types of Cryptos
Due to the exponential growth of the crypto markets, beginners need to know

the various types of cryptos. Let‘s take a look at the different categories of

cryptos.

1.1 What are Crypto-Assets?

Crypto-assets (also known as crypto) are digital currencies that use

cryptography to protect digital data and distributed ledger technology to record

transactions. They make decentralization, immutability, and safe peer-to-peer

crypto transactions possible.

Unlike traditional fiat currencies, these virtual currencies are not controlled by

any trusted third party or centralized authorities like financial institutions. They

offer unique features that distinguish them from traditional financial services and
are hosted on a decentralized system that is often based on blockchain

technology.

1.2 Major Crypto Categories

1.2.1 Bitcoin

Bitcoin pioneered the modern crypto movement. It was created in 2009 by

someone or a collective (known by the pseudonymous name of Satoshi

Nakamoto) who decided to remain anonymous.

Bitcoin serves as a decentralized store of wealth and digital currency. It is also

seen as a long-term investment and a hedge against inflation. Bitcoin, a

deflationary commodity with a limited supply of 21 million coins, has become

increasingly popular among investors and has become the top-performing asset

of the year and the last decade. Off the back of its success, we have seen

increased adoption and increases in the time held by long-term holders, which

shows that those who are investing have high conviction in its long-term

success.

1.2.2 Altcoins and Tokens

Altcoins, or sh*tcoins, as they‘re affectionately known to crypto natives, are any

other crypto-assets other than Bitcoin. Many of these are used for smart

contracts, privacy features, and utility tokens for certain platforms or services.

Examples of popular altcoins include Ethereum (ETH), Ripple (XRP), and

Litecoin (LTC).

Tokens, on the other hand, are assets created on already-existing blockchains

like Ethereum. They can represent diverse physical or digital assets. The

success of the project they're linked to often plays a key part in how much value

they have, though there are often a broad range of other factors that can

determine the value- which, much like company stocks, is often built on

speculation.

Examples of tokens include Uniswap (UNI), which is used for decentralized

exchanges, and Chainlink (LINK), which facilitates smart contracts.

1.2.3 Stablecoins

Stablecoins are created to reduce the extreme volatility that often characterizes

the crypto market. These coins are pegged to stable assets, such as the US

dollar or gold. Popular examples of stablecoins include the market leader,

Tether (USDT). Others include USD Coin (USDC), and DAI.

Stablecoins offer a fast way for traders to transfer money and preserve the

value of their crypto holdings during market volatility.

2. Fundamental Analysis for

Beginners
Crypto trading can be a lucrative task, but beginners should have a solid

foundation in fundamental analysis. This may reduce trading risks and help

novice investors to make more informed decisions.

2.1 What Is Fundamental Analysis?

Fundamental analysis refers to the process of researching the underlying factors

that determine a crypto's value. It helps to know whether a specific digital asset

is overvalued or undervalued by considering several factors.

Here are some essential steps that you can start with:

2.1.1 Evaluate the Whitepaper

The foundation of any crypto project is its whitepaper. It is a technical report that

the crypto's creators published to showcase its purpose, technology, and goals.
Start by thoroughly reading the whitepaper of a crypto when evaluating it. Pay

attention to the following when doing this:

 Understand the goals and vision of the project. What issue is it trying to

address, and how does it intend to solve it?

 Evaluate the crypto's technological components. Is it based on a strong,

cutting-edge blockchain? Does it add any new features or make any

changes to the existing cryptos?

 Examine the project's roadmap to see how it is evolving. An organized

roadmap signifies how committed a team is to accomplishing its goals.

 Assess the qualifications, backgrounds, and prior successes of the

advisers and team members.

 Make sure you evaluate the team's interaction with the community. Do

they respond to questions and concerns? Transparent communication can

build trust.

 Look at the token allocation- how much is allocated to the team, and what

is the vesting period they have to hold for? Urge caution with any projects

that hold more than 25% of their token as a team or between the team

and their early-stage investors. The reason is that if, for example, they

have more than 40% as a team and a short vesting period, they could all

sell if the token pumps, causing a huge fall in price, leaving the investors

that have come in later with nothing. This is often known as a rug pull.

Projects with longer vesting periods are therefore seen to be more secure
 as It shows the core team has confidence in the long-term success of the

token. It also means they can‘t sell their holdings if the token pumps if

they‘ve not reached their vesting stage.

2.1.2 Analyze Utility and Use Cases

Consider the real-world use cases of cryptos when evaluating them. Do they

provide unique solutions to specific issues? Analyze its use cases, utility, and

integration with the blockchain ecosystem as a whole.

2.1.3 Investigate Market Trends

Keep up with the most recent market trends and advancements in the crypto

space. Examine the crypto's compatibility with these developments. For

instance, is it leveraging non-fungible tokens (NFTs) or AI (artificial intelligence)

trends?

2.1.4 Analyze News, Social Sentiment, and Social Media

Following & Engagement

News and social sentiment significantly impact the crypto market. Keep up with

any big collaborations, announcements, or regulatory changes involving the

crypto you're considering. Also, research forums and other media sites to

determine community sentiment.

Do your due diligence on their social channels- if the project has lots of

followers, do the likes and interactions/engagements on their posts seem

legitimate for the number of followers they have? If not, they may have fake

followers or bots to make it appear that they have more followers and that the

project is more popular than it actually is. This is a major red flag to watch out

for! It‘s also worth checking if their following is consistent across various

platforms as, unless they have just set up a new account, this could be another

potential red flag.

3. Technical Analysis for

Beginners
Understanding technical analysis can increase your chances of success when it

comes to crypto trading. This is because you will be able to make informed

decisions in your trading activities.

Keep reading to explore the basics of technical analysis and also discover the

tools and knowledge to get started.

3.1 What Is Technical Analysis?

Technical analysis refers to the process of examining volume data and historical

prices to predict future price changes. Although technical analysis cannot

predict the future with full certainty, it helps traders see patterns, trends, and

potential entry and exit points in the crypto market.

As a beginner, it is highly recommended that you understand the following

components of technical analysis:

3.1.1 Reading Price Charts

3.1.1.1 Candlestick Patterns

Candlestick charts are frequently used in technical analysis. They offer a

graphic representation of price changes over a given period. Different

candlestick patterns can indicate market trends, reversals, or indecision. Some

examples include doji, hammers, and shooting stars.

3.1.1.2 Support and Resistance Levels

Support levels are the price ranges where an asset typically attracts buying

interest, preventing further fall. On the other hand, resistance levels are regions

where selling interest often manifests, stopping the price from rising. These

levels can help you set entry and exit points.

3.1.1.3 Moving Averages

Moving averages make price data over a certain period more consistent,

thereby making it easier to identify trends. The two main types include simple

moving averages (SMA) and exponential moving averages (EMA). Traders

usually use crossovers between different moving averages to know when to buy

and sell.
3.1.2 Oscillators and Momentum Indicators

3.1.2.1 Relative Strength Index (RSI)

The RSI gauges how quickly and frequently prices change. It ranges from 0 to

100, and values below 30 suggest that an asset is oversold, while values above

70 suggest that an asset is overbought, respectively.

3.1.2.2 Moving Average Convergence Divergence (MACD)

The MACD indicator combines two moving averages. It can be used to

determine potential trends and trend reversals. Traders usually look for

crossovers between the MACD line and its signal line when making trading

decisions.

3.1.3 Chart Patterns

3.1.3.1 Head and Shoulders

This pattern suggests that the trend may be about to reverse. It consists of three

peaks, the highest of which is the middle peak. An inverse head and shoulders

pattern suggests a bullish reversal.

3.1.3.2 Double Tops and Bottoms

These patterns serve as warning signs of a possible trend reversal. While a

double bottom is a bullish pattern, a double top is bearish.

4. Conclusion
Although crypto trading offers incredible opportunities for financial

diversification, there are also inherent risks..

You may also wish to review our other blogs, where we cover a broad range of

relevant topics for beginners, intermediate, and advanced traders. As the

popular saying goes in the crypto world, always do your own research (DYOR)

and be cautious.

As ever, our materials are provided for educational purposes and should not be

considered as financial advice.

If you are interested in keeping up to date with One Trading‘s updates, follow us

across our various channels here. We‘d especially love to see you and hear from

you via our community

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subscribe for the weekly newsletter here.

Disclaimer: This material is for informational purposes only, and is not

intended to provide legal, tax, financial, or investment advice. Past

performance is not necessarily indicative of the future nor a reliable

indicator of the likely performance of any investment. Recipients should

consult their own advisors before making these types of decisions. One

Trading has no responsibility or liability for any decision made or any

other acts or omissions in connection with Recipient’s use of this

material.

In the United Kingdom, this communication may constitute a financial

promotion for the purposes of the Financial Services and Markets Act

2000. Accordingly, it is issued only to, or directed only at, persons who

are investment professionals within the meaning of Article 19 of the

Financial Services and Markets Act 2000 (Financial Promotion) Order

2005 (the "FPO").

 Crypto Fundamental Analysis: Exploring

the Foundation of Crypto Projects

Learn how to predict value and make better-informed trading decisions

Key Takeaways

 Crypto fundamental analysis provides valuable insights into the potential

and value of cryptocurrencies, considering factors such as team expertise,

technology, market opportunity, tokenomics, and more;

 Combining fundamental analysis with other forms of analysis and staying

informed about industry developments enhances decision-making in the

dynamic cryptocurrency market;

 Some of the limitations of fundamental analysis include limited data

availability, market volatility, subjectivity, and regulatory uncertainties.

In the realm of cryptocurrencies, where blockchain technology has

transformed the financial landscape, one of the most crucial skills you

should have is knowing how to employ crypto fundamental analysis. This

approach involves examining the fundamental aspects of cryptocurrencies

to gain valuable insights into their intrinsic value, future prospects, and

potential risks.

Ultimately, this analytical view empowers traders to make well-rounded

investment decisions across platforms like Binance, Bybit, and Kraken, as

it enables them to evaluate overall market sentiment and the potential

value of a specific asset. That said, let's explore what is fundamental

analysis at its core.

 Did you know?

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Table of Contents

 1. What is Fundamental Analysis?

  1.1. Fundamental Analysis VS Technical Analysis

 2. What is Crypto Fundamental Analysis?

 2.1. Crypto Fundamental Analysis VS Stocks Fundamental Analysis

 2.2. Crypto Fundamental Analysis VS Forex Fundamental Analysis

 3. How to Perform Crypto Fundamental Analysis?

 3.1. Crypto Fundamental Analysis Tools

 3.2. Crypto Fundamental Analysis Example: Bitcoin

 4. Limitations of Crypto Fundamental Analysis

 5. Conclusions

What is Fundamental Analysis?

Even though our main focus is crypto fundamental analysis, firstly, it is a

must to answer the question of what is fundamental analysis in finance

overall.

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Fundamental analysis is a method used to evaluate the intrinsic value

of a financial asset, such as stocks, bonds, or commodities[1]. It is one of

the two primary methods of analyzing investments, with the other

being technical analysis.

The following are the key elements that should be kept in mind whenever

the question ―What is fundamental analysis?‖ is raised:

 Financial Statements. Analyzing an asset's financial statements, including

balance sheets, income statements, and cash flow statements, provides

insights into its financial health and performance. Key metrics and ratios

like revenue growth, profitability, debt levels, and cash flow help gauge

stability, profitability, and growth potential.

 Economic and Industry Analysis. Fundamental analysis considers broader

economic conditions and industry dynamics. Analyzing indicators like GDP

growth, inflation rates, and interest rates helps evaluate the asset's

response to the environment. Assessing the industry's market size,

competition, technology, and regulations provides context for risk and

opportunity evaluation.

 Management and Leadership Evaluation. It is crucial to assess the

competence and effectiveness of a company's management team.

Analyzing expertise, experience, track record, strategic vision, and

adaptability helps evaluate long-term growth and sustainable performance

potential.

 Competitive Positioning. Understanding the asset's competitive

landscape is vital, too. Evaluating market share, competitive advantages,

 unique selling propositions, and barriers to entry helps gauge market

position and resilience against the competition.

 Regulatory and Legal Factors. It is important to consider the legal and

regulatory environment. Understanding regulations, compliance

requirements, and legal risks helps assess the asset's long-term viability

and adaptability to changing landscapes.

So, these are all the parts that encompass the essence of what is

fundamental analysis. However, this is not the only type of analysis there is

– I'm sure you’ve heard the term ―technical analysis‖ once or twice as

well. But what is the difference between fundamental and technical

analysis? Well, let’s see.

Fundamental Analysis VS Technical Analysis

The difference between fundamental and technical analysis starts in their

focus, time horizon, sources of information, tools used, approach to value,

and also the main factors that are considered to differ between them.

Let's dive deeper into fundamental analysis vs technical analysis to

understand the nuance of both of these approaches.

Fundamental analysis evaluates an asset's intrinsic value and long-term

prospects by considering financial statements, economic conditions,

industry trends, and management quality. It takes a long-term perspective

and aims to identify investments with growth potential based on

fundamentals.

Technical analysis, on the other hand, studies historical price patterns,

trends, and trading volumes. It focuses on short-term

trading opportunities by analyzing charts, indicators, and patterns. It

emphasizes market psychology and supply-demand dynamics.

Fundamental analysis relies on financial statements, economic data,

industry research, and external factors to evaluate an asset's intrinsic value.

The technical analysis primarily relies on historical price data and market-

related information, believing that all relevant information is reflected in

price movements.
Fundamental analysis uses financial ratios, valuation models, and

qualitative assessments to evaluate an asset's fundamentals. It involves

extensive research and analysis of various data sources to determine the

asset's value. Technical analysis uses charts, trendlines, moving averages,

and indicators to analyze price movements and identify trading

opportunities.

The differences between fundamental and technical analysis can be

summarized as the former focuses on long-term value and growth

potential, while the latter emphasizes short-term price patterns and

trading opportunities.
So, as I've mentioned before, the approaches of fundamental analysis vs

technical analysis differ in their focus, time horizon, sources of information,

and tools used.

Many investors utilize a combination of both to gain a more

comprehensive understanding of an asset's potential. By considering the

differences between fundamental and technical analysis, investors can

make more informed investment decisions in the dynamic world of

finance.

Having explored the concept of fundamental analysis vs technical analysis,

let’s now focus on the realm of cryptocurrencies. After all, analyzing

cryptocurrencies through crypto fundamental analysis provides you with

unique factors and considerations.

The Most Liked Findings

Looking for more in-depth information on related topics? We have gathered similar

articles for you to spare your time. Take a look!

CRYPTOCURRENCIES

Blockchain in Supply Chain: Advantages, Challenges, and Applications

CRYPTOCURRENCIES

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CRYPTOCURRENCIES

Blockchain Security: What it is & Why it Matters

What is Crypto Fundamental Analysis?

Crypto fundamental analysis is an approach used to evaluate

cryptocurrencies by examining the underlying factors that contribute to

their value and potential for growth. While similar in principle to traditional

fundamental analysis, crypto fundamental analysis takes into account

specific characteristics of the crypto market.

At its core, it involves assessing the fundamentals of a cryptocurrency

project. This includes evaluating the technology behind the cryptocurrency

 and understanding its potential for innovation and disruption within

various industries.

Certain metrics and indicators are always used to evaluate the viability and

potential of a cryptocurrency project. These metrics offer insights into

growth prospects, adoption potential, and sustainability. While they are

important, they can be easily missed by the untrained eye, let’s take a

quick look at them:

 Team and Development. The team behind a cryptocurrency project plays

a crucial role in its success. Assessing the team's expertise, track record,

and ability to execute the project's vision is vital. Additionally, evaluating

the progress, updates, and roadmap of the project provides insights into

its future prospects.

 Technology and Innovation. The underlying technology of a

cryptocurrency (the blockchain) is a fundamental aspect to consider.

Analyzing the technological features, scalability, security measures, and

innovation within the project distinguishes promising cryptocurrencies

from the rest. Tools like GitHub activity, code audits, and technical
 assessments aid in evaluating the quality and robustness of the

technology.

 Tokenomics and Utility. You also need to understand the token

economics and utility within a cryptocurrency ecosystem. Factors such as

token distribution, token supply, token use cases, and incentives for token

holders contribute to the overall value proposition.

 Market Opportunity and Competition. Assessing the market opportunity

that a cryptocurrency targets is essential. Look for the problem it aims to

solve, the size of the target market, and the competitive landscape.

 Adoption and Community. The level of adoption and community support

is a significant factor in evaluating a cryptocurrency's potential. By

analyzing factors such as user adoption, partnerships, collaborations, and

 community engagement, one can gather insights into the project's traction

and potential future growth.

 Regulatory Environment. Evaluating the regulatory

landscape surrounding cryptocurrencies is crucial for assessing risks and

compliance considerations. Analyzing the legal frameworks, regulatory

developments, and the project's compliance measures helps determine its

sustainability in different jurisdictions.

After exploring this concept and its key metrics, let’s shift our focus to

a comparative analysis between crypto and stocks fundamental analysis.

While these methodologies share fundamental analysis principles, there

are significant differences in their application.

Crypto Fundamental Analysis VS Stocks

Fundamental Analysis

The distinctions between fundamental analysis of stocks and crypto can be

distinguished by analyzing 4 key factors – market dynamics, risks, valuation

techniques, and regulations.

Market Dynamics and Volatility

Cryptocurrencies are more volatile than traditional stocks due to their

decentralized nature and relatively young market[2]. Factors like market

sentiment, regulations, technology, and speculation drive this volatility,

making it essential to consider these dynamics in crypto fundamental

analysis.

Stocks, traded on regulated exchanges, generally have lower volatility.

Stock fundamental analysis focuses on macroeconomic factors, company

news, earnings reports, and industry trends.

Risk Considerations

Cryptocurrencies face risks such as technological vulnerabilities, security

breaches, regulatory uncertainty, and market manipulation due to the

rapidly evolving nature of the industry.

Stocks, however, are exposed to risks related to financial performance,

industry competition, management stability, and regulatory compliance.

So, its risk analysis focuses on financial statements and company-specific

factors influenced by broader economic factors.

Valuation Techniques
Valuation techniques in the fundamental analysis of stocks and crypto

differ due to the unique characteristics of each asset class. In stock

fundamental analysis, common methods include price-to-earnings ratios,

discounted cash flow, and industry comparisons to determine intrinsic

value.

In crypto fundamental analysis, due to limited financial data and business

models, valuation relies on network value-to-transactions ratio, token

utility analysis, and comparative analysis with similar blockchain projects.

Regulatory Considerations
Cryptocurrencies operate in a rapidly evolving regulatory landscape[3],

requiring analysts to stay updated on legal developments and comply with

regulations like AML and KYC requirements.

Stocks, on the other hand, operate within established regulatory

frameworks, making it easier for analysts to evaluate compliance and legal

aspects. Fundamental analysis of stocks involves assessing regulatory

filings, corporate governance, and industry-specific regulations.

Crypto fundamental analysis and the fundamental analysis of stocks share

the common goal of evaluating the value and potential of assets. However,

their application and evaluation criteria differ significantly due to the

distinct characteristics of each asset class.

By recognizing the differences between the fundamental analysis of stocks

and crypto, investors can tailor their analytical approaches and make more

informed decisions.

Now, did you know that fundamental analysis can be done on the forex

market, too? So, let's explore the differences between crypto fundamental

analysis and forex fundamental analysis.

Crypto Fundamental Analysis VS Forex Fundamental

Analysis

Crypto fundamental analysis and fundamental analysis forex traders

employ have two distinct approaches for the evaluation of assets in their

respective markets. While the fundamental analysis principles remain the

foundation, the differences between markets introduce unique

considerations and evaluation criteria.

So, what are these differences?

Market Dynamics and Volatility

Cryptocurrencies and forex differ in market dynamics and

volatility. Cryptocurrencies, being quite new and decentralized, are more

volatile due to factors like market sentiment, regulations, technology

advancements, and speculation.

In contrast, forex is a global decentralized marketplace with lower volatility

influenced by geopolitical events, economic indicators, central bank

policies, and market sentiment.

Fundamental Factors

For cryptocurrencies, the fundamental analysis considers factors like

blockchain technology, tokenomics, project team dynamics, community

engagement, and regulatory landscape.

However, fundamental analysis forex traders employ focuses on

macroeconomic indicators, interest rates, inflation rates, geopolitical

stability, and monetary policies of countries.

Risk Considerations

Cryptocurrencies pose risks such as technological vulnerabilities, security

breaches, regulatory uncertainty, and market manipulation.

Forex trading carries risks related to economic and political factors,

exchange rate fluctuations, and unforeseen market events, which are

evaluated through economic indicators, political stability, and other

currency-affecting factors.

By recognizing the contrasting dynamics between both, we gain valuable

insights into the distinct approaches of fundamental analysis of forex and

crypto-focused markets.

That said, let's explore the practical side of crypto fundamental analysis.

From gathering information to evaluating metrics, find out the strategies

and techniques needed to navigate the crypto market and make informed

investment decisions.

How to Perform Crypto Fundamental

Analysis?

Performing crypto fundamental analysis involves a systematic approach to

evaluate the value and potential of cryptocurrencies. By following this

step-by-step process, you can gather essential information, assess key

metrics, and make informed decisions:

Step 1: Define your investment goals. Clarify your objectives, whether for

long-term holdings, short-term trading, or a specific investment strategy.

This will help you focus your analysis and identify suitable

cryptocurrencies.

Step 2: Gather information. Start by researching the cryptocurrency you

want to analyze. Explore its website, whitepaper, and official

documentation to understand its objectives, technology, and roadmap.

Additionally, stay updated with news, announcements, and community

discussions related to that cryptocurrency.

Step 3: Evaluate the team. Assess the expertise and track record of the

team behind the cryptocurrency. Look for their qualifications, experience,

and previous projects. A capable team is crucial for successfully executing

the project's vision. Of course, you will not be able to do that if the team is

anonymous (but that anonymity might sometimes lead to scams).

Step 4: Analyze the technology. Dive into the technological aspects of

cryptocurrency. Evaluate the underlying blockchain technology, consensus

mechanism, scalability solutions, and security measures. Consider factors

like network activity, code audits, and the frequency of updates to gauge

the technical robustness.

Step 5: Assess the market opportunity. Evaluate the target market and the

problem the cryptocurrency aims to solve. Analyze the size of the market,

competition, and potential for adoption. Look for unique selling points and

advantages that differentiate the cryptocurrency from its competitors.

Step 6: Study tokenomics and utility. Understand the token economics and

utility within the cryptocurrency ecosystem. Assess factors such as token

distribution, token supply, token use cases, and incentives for token

holders. Evaluate how the token's value may be appreciated based on its

utility and demand.

Step 7: Review financials (if possible). If the cryptocurrency has a financial

aspect, such as staking or lending, review the financial metrics. Consider

factors like revenue models, token issuance, and financial transparency to

gauge the financial viability of the project.

Step 8: Monitor regulatory considerations. Assess the regulatory

environment surrounding the cryptocurrency. Stay informed about legal

frameworks, regulatory developments, and compliance measures taken by

the project. Evaluate the risks associated with regulatory changes and the

project's adaptability.

Step 9: Analyze community sentiment. Consider the sentiment and

engagement of the cryptocurrency community. Monitor social media

platforms, forums, and dedicated community channels to gauge the level

of support, enthusiasm, and engagement among users.

Step 10: Make informed decisions. After conducting a comprehensive

analysis, use the gathered insights to make informed investment decisions.

Assess the risk-reward ratio, align your analysis with your investment goals,

and consider diversification strategies.

But which fundamental analysis tools should you use to employ this

analysis?

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Crypto Fundamental Analysis Tools

The process of crypto fundamental analysis involves various tools and

resources that can greatly enhance the analytical process and provide

valuable insights. These tools help investors and analysts gather relevant

data, and track market trends. Here are some key tools and resources to

consider:
News Aggregators

Keeping up with the latest news and developments in the crypto industry

is crucial for effective fundamental analysis. News aggregators provide a

centralized platform to stay updated on market trends and project

updates.

Crypto Trackers

Tools like the BitDegree crypto tracker provide comprehensive data on

cryptocurrencies, including price movements, market capitalization, trading

volumes, historical data, and basic project details. Such tools allow users to

filter and compare cryptocurrencies based on various criteria, aiding in the

analysis process.

Social Listening Tools

Social listening tools gather and analyze data from various social media

platforms, tracking sentiment, mentions, and discussions related to

cryptocurrencies (you can find that on the BitDegree crypto tracker, too).

These social signals provide sentiment indicators, social volume trends,

and real-time social insights, helping analysts gauge market sentiment and

community engagement.

Blockchain Explorers

Blockchain explorers allow users to explore and analyze blockchain

transactions, addresses, and smart contracts. They provide transparency

and visibility into cryptocurrencies' on-chain activities, enabling analysts to

assess transaction volumes, network congestion, and token movement.

Community Forums and Social Media

Engaging with the crypto community on platforms like Reddit, Twitter, and

Telegram can provide valuable insights and firsthand information about

specific cryptocurrencies. These platforms serve as forums for discussions,

project updates, and insights from industry experts and enthusiasts.

 Fundamental Analysis Websites and Reports

Several websites and research companies specialize in crypto fundamental

analysis, offering detailed reports, analysis, and investment insights. These

sources provide comprehensive coverage of cryptocurrencies, including

project evaluations, financial analysis, and market trends.

Now that you know how to make crypto fundamental analysis and which

tools to use, let me give you a fundamental analysis example.

Pros

 A very well-known crypto exchange platform

 More than 500 different cryptos available

 Two-factor authentication

Main Features

 Over 500 different cryptocurrencies available

 Strong security

 Small withdrawal fees

CLAIM $600 REWARD

 Pros

 Secure and reliable

 Low fees

 A good amount of fiat currencies accepted

Main Features

 Reputable exchange

 Multiple fiat currencies are accepted

 Relatively low trading fees

VISIT SITE

Pros

 Very low trading fees

 Exceptional functionality

 Mobile trading app

Main Features

 Very competitive trading fees

 An intuitive mobile app

 Up to 100x leverage available

UP TO $30,000 BONUS

Crypto Fundamental Analysis Example: Bitcoin

I'll use Bitcoin for this fundamental analysis example:

Understanding the Project

Bitcoin is the first successful and most well-known cryptocurrency, created

by an unknown person or group under the pseudonym Satoshi

Nakamoto. Bitcoin aims to serve as a decentralized digital currency that

enables peer-to-peer transactions without the need for intermediaries like

banks.

Team and Development

Bitcoin's development is open-source and maintained by a decentralized

community of developers from around the world. While its creator, Satoshi

Nakamoto, remains anonymous, the community's ongoing development

has led to regular updates and improvements to the protocol.

Technology and Security

Bitcoin's underlying technology is built on the blockchain, which records all

transactions in a transparent and immutable manner. Security has been

robust over the years, as it has the longest-running network.

Community and Social Presence

Bitcoin has one of the most extensive and active communities in the

cryptocurrency space. It has a strong presence on various social media

platforms, forums, and conferences, with many advocates and supporters.

Use Case and Adoption

The primary use case is serving as a store of value and a medium of

exchange. It has gained adoption for remittances, international money

transfers, and as a hedge against inflation and economic

uncertainties. Many argue that Bitcoin is the digital gold[4].

Partnerships and Collaborations

Bitcoin does not rely on traditional partnerships or collaborations like

some other cryptocurrencies. Its decentralized nature means that it

operates independently of companies or entities.

Market Trends and Competition

As of writing, Bitcoin remains the dominant cryptocurrency with the

highest market capitalization, liquidity, and trading volumes.

Tokenomics

Bitcoin's total supply is capped at 21 million coins, making it a deflationary

asset. The block reward is halved approximately every four years in a

process known as the halving, reducing the rate of new supply issuance

over time.
Financials and Funding

Bitcoin's development is self-sustaining, driven by its community of

developers and miners who validate transactions and secure the network.

There is no central company or entity responsible for funding its

development.

Regulatory Environment

The regulatory landscape varies from country to country. Some nations

have even embraced it as a legal tender, while others have imposed

restrictions or outright bans on its use. The regulatory environment

continues to evolve globally.

News and Events

Bitcoin is often impacted by significant news events, such as regulatory

developments, institutional adoptions, macroeconomic trends, and

technological advancements.

All in all, the insights of the fundamental analysis example of

Bitcoin enable you to identify investment opportunities with strong

fundamentals, assess growth potential, and make better-informed

decisions.

However, there are some limitations of crypto fundamental analysis that

you should be aware, too.

Limitations of Crypto Fundamental

Analysis

While crypto fundamental analysis provides valuable insights, it is

important to recognize its inherent limitations. Here are some key

considerations to keep in mind:

 Limited Data Availability. One challenge is the availability and accuracy

of data in the cryptocurrency market. Information gaps or unreliable

sources can affect the accuracy and completeness of your analysis.

 Market Volatility. Cryptocurrency markets are highly volatile, making it

challenging to predict future prices based solely on fundamental analysis.

External factors, market sentiment, and speculative trading can

overshadow fundamental factors.

 Subjectivity and Bias. Personal biases, investor sentiment, or undue

influence can impact the analysis and potentially skew conclusions.

 Regulatory Uncertainty. The regulatory landscape for cryptocurrencies is

evolving, leading to uncertainty. Regulatory changes or government

 actions can significantly impact the value and prospects of a

cryptocurrency, making long-term assessments challenging.

 Emerging Technology Risks. Cryptocurrencies rely on emerging

technologies that may face technical challenges, scalability issues, or

security vulnerabilities. Assessing the risks associated with novel

technologies requires careful consideration.

 Market Inefficiencies. The cryptocurrency market is still relatively young

and can exhibit inefficiencies, such as information asymmetry and market

manipulation. These factors can distort the perceived value of

cryptocurrencies and impact investment decisions.

 Long-Term Predictability. Accurately predicting long-term price

movements can be challenging. Market trends, adoption rates, and

competitive dynamics can positively influence future performance.

By acknowledging these limitations and risks, you can approach the crypto

fundamental analysis with a critical mindset and adapt your strategies

accordingly. Understanding the broader market dynamics and staying

informed about industry developments will help mitigate potential pitfalls

and enhance your decision-making process.

The Most Trending Findings

Browse our collection of the most thorough Crypto Exchange related articles, guides &

tutorials. Always be in the know & make informed decisions!

CRYPTOCURRENCIES

Investing in Bitcoin: Everything You Need to Know to Buy That Lambo

CRYPTOCURRENCIES
Electroneum Price Prediction: Will It Rise?

CRYPTOCURRENCIES

How to Buy Verge - Buying Verge Made Easy

Conclusions

To sum up, crypto fundamental analysis is a powerful tool for investors

seeking to navigate the dynamic cryptocurrency market. By evaluating key

factors such as team expertise, technology, market opportunity, and

tokenomics, the fundamental analysis provides valuable insights into a

cryptocurrency's potential.
Whether you're trading on popular exchanges like Binance, Bybit,

or Kraken, understanding the fundamentals of crypto is essential for

making investment decisions. However, it's crucial to acknowledge the

limitations of crypto fundamental analysis, including limited data

availability, market volatility, subjectivity, and regulatory uncertainties.

Nevertheless, by combining fundamental analysis with other forms of

analysis and staying informed about industry developments, you can

make better trading decisions and mitigate pitfalls.

TOP3 Recommended Crypto Exchanges:
8 Best Crypto Tools for Research &

Analysis 2024

Kane Pepi

Last updated: May 7, 2024 at 11:05 PDT | 15 min read

Crypto analytics tools can be useful to investors in a number of ways. Not only can they

help investors understand real-time and historical market data, but they can also be used

to make better, informed trading decisions.

In this guide, we list the best crypto analysis tools for both beginners and experienced

traders alike.

The Best Crypto Tools to Use in 2024

Below are the top crypto tools to consider using in 2024, in terms of features, ease of use,

exchange integration, and more.

1. 99Bitcoins – Overall Best Crypto Tool in 2024

2. Cryptosignals.org – Get Daily Crypto Telegram Signal Alerts

3. TradingView – Crypto Tool for Charting and Technical Analysis

4. Messari – Best Crypto Research Site For Advanced Traders

5. Cryptowatch – Crypto Tool Supporting Multi-Exchange Trading

6. Shrimpy – Combine Crypto Portfolio Management With Auto Trading

 7. Glassnode – Crypto Tool for On-Chain Analytics

8. Coinmarketcap – Track Cryptocurrency Prices in Real-time

Traders can read our full reviews of the best crypto analysis tools listed above in the

following section.

Review of the Best Crypto Analysis Tools

Crypto investors can optimize their decisions using a variety of approaches. However,

regardless of the strategy, all investors need access to market data in order to arrive at

their judgments.

The best crypto tools in the market provide investors with simplified market data, making it

possible for them to process information quickly.

Below, we take a closer look at the most popular tools that help investors make money

with cryptocurrency.

1. 99Bitcoins – Overall Best Crypto Tool in 2024

99Bitcoins offers a standout learn-to-earn model, making it the best crypto tool for those

looking to understand blockchain and cryptocurrency. Through its platform, users earn

$99BTC tokens by engaging with educational content, making learning both rewarding

and stimulating.
Currently in its first presale stage, $99BTC is attractively priced at just $0.00104, providing

an excellent entry point for investors. The project‘s strong social media presence and swift

presale success, raising over $1.1 million, underscore its potential.

As it prepares to list on more exchanges and launch its learning platform, $99BTC is well-

positioned for significant growth in 2024.

Visit 99Bitcoins

2. Cryptosignals.org – Get Daily Crypto Telegram Signal Alerts

Cryptosignals.org is one of the most popular tools for crypto signals. It offers daily trading

suggestions via Telegram. Users can then assess the crypto signals in real-time and place

trades accordingly.

The signals provided by Cryptosignals.org includes everything required to place a trade.

For instance, each signal tells users which crypto pair they should trade and whether to

place a buy or sell order. The signal will also tell the user what limit, take-profit, and stop-

loss orders they should place.

Apart from sending crypto signals, this platform also offers a detailed analysis of the

reasoning behind the trading suggestion. This helps investors understand more about how

to place trades based on market data. This approach is the main reason why

Cryptosignals.org is considered one of the best crypto Telegram groups for inexperienced

traders.

Cryptosignals.org offers both free and paid subscription services. The platform issues 2 to

3 signals per week for free users. On the other hand, paid subscribers can get 2 to 3

signals every day. As of writing, Cryptosignals.org offers provides signals for Bitcoin,

Ethereum, Binance Coin, Cardano, Polkadot, Chainlink, and Ripple.

The paid subscription is available at £42 per month (around $48) or £210 (about $240) per

year. Alternatively, it is also possible to access Cryptosignals.org‘s signals by signing up

with one of the platform‘s partner brokers. This includes Capital.com and AvaTrade –

however, users will have to make a minimum deposit of $250.

As of writing, Cryptosignals.org also offers lifetime access to their VIP Signals for

investors who buy at least $250 worth of Dash 2 Trade tokens – the best cryptocurrency

to buy in 2024.

Visit Cryptosignals.org
3. TradingView – Crypto Tool for Charting and Technical Analysis

TradingView is one of the best crypto analytics platforms to offer live trading charts for

digital assets and stocks. It comes with 100+ pre-built technical indicators and is

compatible with many crypto exchanges. There are also over 100,000 community-

built crypto indicators, which are accessible to all TradingView users.

And what‘s more, TradingView also lets its users simulate real market conditions in order

to test their strategies. They can use this feature to backtest ready-made as well as self-

written strategies in real-time based on historical data. Apart from analytical tools,

TradingView also sends its users snapshots of daily financial news.

TradingView has charting tools that are open for both free and paid users. The main

difference between different tiers of subscriptions is the number of charts and technical

indicators accessible. A free TradingView account will suffice for most traders for the

purpose of gaining access to basic technical analysis tools – which include five indicators

per chart and 20 server-side alerts.

The basic plan starts at $14.95 a month. Advanced traders who wish to unlock a higher

number of charts and indicators can opt for a Pro+ or Premium plan.

4. Messari – Best Crypto Research Site For Advanced Traders

Messari is a crypto tool that aggregates data from the markets and presents it to users in

the form of charts and research reports. It allows users to filter assets, set up a watchlist,

and analyze crypto data using hundreds of charting tools. The platform also updates users

with real-time market news and important events happening in the crypto space.

At first glance, Messari has a sophisticated interface that might be a bit overwhelming for

new crypto traders. The platform is not particularly user-friendly, however, experienced

traders are likely to find it seamless to navigate through the site.

The most impressive feature of Messari is its crypto reports. The Messari team does the

groundwork to offer its users detailed research reports that sum up the state of different
cryptocurrencies. These are available in the form of quarterly reports or as analytical

research papers.

Crypto traders can indeed use Messari for free – however, as imaginable, the core

features are limited. To get the most out of this cryptocurrency analysis tool, traders can

upgrade to Messari Pro – at $24.99 a month, paid annually.

The paid subscription comes with daily insights and long-form research, in addition to

access to advanced screeners and charting tools. Moreover, the Messari Pro version also

lets users download data into a spreadsheet.

5. Cryptowatch – Crypto Tool Supporting Multi-Exchange Trading

Cryptowatch is a comprehensive analysis tool that is owned by the popular exchange

Kraken. This platform allows users to scan digital currency prices, analyze market

movements, and even place trades on major exchanges – all via a single interface. This

means that Cryptowatch is one of the best cryptocurrency trading tools for short-term

investors.

This platform offers its users access to live crypto prices and order book data from over

800 exchanges. Users also have the option to design their dashboard based on the crypto

charting tools they prefer. These tools help traders to visualize live exchange data and

come with in-built technical analysis indicators and overlays.

Furthermore, Cryptowatch can be assessed via both mobile and desktop devices. This

crypto tool has an a la carte payment model, which means that users are only charged for

the features they use. When creating an account, users are offered access to the core

features – which include trading, portfolio management, charting tools, and a chat

function.

New users are also offered a balance of 250 Cryptowatch credits. As users set price alerts

or use other features, a certain amount of Cryptowatch credits will be debited from their

balance. If needed, users can always purchase more Cryptowatch credits.

6. Shrimpy – Combine Crypto Portfolio Management With Auto Trading

Shrimpy is primarily a crypto portfolio management website. It links with multiple

exchanges and offers its users an overall view of their crypto portfolio. This means that

investors need not log in to multiple exchanges to keep track of the performance of their

investments.

Instead, Shrimpy offers a visual summary of the overall allocation of digital coins on

different exchanges. Users can also set directions for how much portfolio allocation should

be given for each cryptocurrency.

For instance, users can direct Shrimpy to increase the allocation for Bitcoin if the

cryptocurrency‘s dominance increases in the market. So, if Bitcoin goes through a bullish

phase, the platform will automatically execute trades across exchanges on the user‘s

behalf.

This way, Shrimpy can automate an investor‘s portfolio allocation. The platform can also

be used for copying the strategies of other established traders on the platform. Altogether,

Shrimpy is a great tool that simplifies crypto investing for its users.

However, Shrimpy does not offer any free services. Those who wish to use this crypto tool

can get on board with the starter pack at $19 a month. It is also possible to try out the

demo platform before signing up for a paid plan.

7. Glassnode – Crypto Tool for On-Chain Analytics

Glassnode gathers data from different blockchains to measure activity on crypto networks.

It then breaks down this data to offer blockchain metrics and other insights to crypto

traders and investors. This makes Glassnode one of the best crypto analysis tools for

processing on-chain data.

This on-chain data can tell users about the market capitalization of cryptocurrencies and

for how long investors are holding their assets on average. This data can further indicate

the future prospects of a specific cryptocurrency.

Glassnode also presents its data in the form of charts and provides its users with the

option to customize their dashboard to their preferences. The platform also provides price
data and lets its users set alerts. The platform divides its data into multiple tiers based on

how advanced it is.

The tier 1 data is updated every 24 hours and is accessible for free. The paid subscription

for tier 2 and 3 data starts at $29 per month.

8. Coinmarketcap – Track Cryptocurrency Prices in Real-time

Coinmarketcap has established itself as one of the most-trusted cryptocurrency platforms

over the years. This platform consults a variety of verified sources to provide accurate

price data for different digital assets.

It also provides information on trading volume, market capitalization, and circulating

supplies of different cryptocurrencies – in a simple and easy-to-understand manner.

Coinmarketcap is an entity operating under Binance Capital Mgmt – the global blockchain

company.

This allows CoinMarketCap to tap into its parent company‘s extensive resources to

acquire more in-depth data about new projects and bring higher-quality information to its

users.
For many investors, Coinmarketcap is the go-to site to track cryptocurrency prices, spot

new coin listings, and even learn about emerging presales. Investors can also set up price

alerts on Coinmarketcap to be notified of any changes in the movement of their favorite

digital assets.

Coinmarketcap caters not only to crypto enthusiasts but also offers up-to-date information

on the best NFTs and metaverse projects. And most importantly, all the information

available on Coinmarketcap is free to access – which undoubtedly makes this one of

the best crypto portfolio trackers to date.

Why Use Crypto Tools?

With tens of thousands of projects, the crypto space is virtually awash with investment

opportunities. Since the space evolves at a rapid pace, traders might miss out on

important market news and factors that could affect the performance of their investments.

Crypto tools can be a good option for those looking to find the best cryptos to invest in as

well as the best crypto index funds.

As such, it is of the utmost importance to stay up-to-date with relevant market data.

 Proficient traders use the best crypto tools before making a move.

 These tools can help understand how market sentiment can affect the price of a

digital token and its volatility.

 Crypto analytics tools can also scan the markets to find the best trading

opportunities and alert investors of them in the form of signals.

 Some crypto tools also notify investors of new cryptocurrencies launching in the

market.
In other words, the best crypto analysis tools can make the process of investing a lot

easier. They offer real-time data that help traders make prompt decisions – so that they

don‘t miss out on any potentially profitable opportunities.

Types of Crypto Analysis Tools

Crypto research tools can help investors increase their chances of making profits – by

providing access to valuable market data and allowing them to measure the potential

risks. However, there are different types of crypto tools available.

Therefore, investors should first be familiar with the different types of analytical services

out there before picking the best crypto trading tools for their preferred strategies.

Crypto Charting Tools

The best crypto tools help users visualize market data in the form of charts. This refers to

graphical representations of the information, such as historical prices and trading volumes

– plotted against time intervals.

These charts form patterns based on the previous price movements of cryptocurrencies

and can be used to spot different investment opportunities. Charting tools are also used

hand-in-hand with technical indicators to speculate on the future direction of

cryptocurrencies.

Crypto Analytics

Crypto analytics is a vast term that encompasses different types of tools under its

umbrella. For instance, some tools examine on-chain analytics.

This represents transaction information recorded on the blockchain. On-chain analytical

tools such as Dash 2 Trade track data regarding wallet addresses, transactions, miners‘

fees, and more.

Similarly, another emerging field within crypto analytics is socio-economic indicators.

 In the case of cryptocurrencies, major market movements are often dictated by

sociocultural developments.

 This is mainly because the value of a cryptocurrency is driven by the perception of

investors first; the technical factors and use cases only come second.

The best crypto tools available these days can track cultural trends – via platforms such

as Reddit, Twitter, and other social media networks. This enables investors to spot

the next cryptocurrency to explode.

Trading Bots

The best crypto trading tools for short-term investors are those that come with automation.

This means that traders need not watch over the market at all times.
Instead, these crypto tools allow traders to set predefined conditions, and when these data

points are met, positions are executed automatically.

Some of the best crypto trading bots also allow their users to copy the strategies of other

investors. This approach is widely called ‗copy trading‘ – and enables investors to benefit

from the expertise of advanced traders.

Price Trackers

Cryptocurrency analysis tools can also be used to track the price action of digital assets.

In other words, these crypto tools will notify investors of any sudden changes in the

market price of digital assets.

The best crypto trading tools let users set up alerts that automatically send notifications

when certain price thresholds are met. This can help investors spot sudden bullish or

bearish movements or trend reversals.

New Coin Listings

Crypto launches offer investors some of the most profitable opportunities in the market. To

identify the best crypto presales, investors should consider a variety of factors, such as

the whitepaper of the project and the credibility of the team.

Needless to say, the risk with new crypto coins is high, as the underlying business model

is to be proven. Still, the best crypto tools alert their users about new coin listings so they

don‘t miss out on any investment opportunities that could potentially turn out to be

profitable.

How to Use Crypto Tools: 99Bitcoins Example

As we mentioned above, the 99Bitcoins learn-to-earn platform is still in its early stages.

Once it‘s up and running, investors can learn about blockchain and cryptocurrency while

earning $99BTC tokens.

Below, we explain in detail the best way for investors to buy, stake, and claim $99BTC,

before the platform fully launches.

Step 1: Get a Crypto Wallet

To participate in the $99BTC presale, you need a compatible crypto wallet like MetaMask

or Coinbase Wallet. Download and set up the wallet on your device. For detailed

instructions on setting up a MetaMask wallet, follow our guide on how to set up a

MetaMask wallet.
Step 2: Add Crypto to Your Wallet

Ensure you have cryptocurrencies like Ethereum (ETH), BNB (BNB), or Tether (USDT) in

your wallet. Purchase these from any major crypto exchange and transfer them to your

wallet. Some of the best crypto wallets may also offer direct purchases via card or bank

transfer.

Step 3: Connect Your Wallet to the 99Bitcoins Presale

Navigate to the 99Bitcoins Token presale homepage. Look for the ‗Connect Wallet‘ button,

select your wallet type, and follow the prompts to link your wallet to the presale platform.
Step 4: Buy $99BTC

With your wallet connected, select the type of crypto (ETH, USDT, or BNB) you wish to

use to buy $99BTC. Input the amount of $99BTC tokens you want to purchase and click

―Buy Now‖ to execute the transaction. If you wish to stake immediately, click ―Buy and

Stake for xxx Rewards‖ to stake your tokens as soon as the purchase is confirmed.
Step 5: Claim Your $99BTC Tokens

If you choose not to stake your tokens, you‘ll need to claim them after the presale ends.

Visit the presale website again, and click the claim button. Stay updated with the exact

dates for the claim process by following 99Bitcoins on X.

Conclusion: What Is the Best Crypto Tool in 2024?

99Bitcoins is the best crypto tool in 2024 due to its innovative learn-to-earn model,

allowing users to acquire $99BTC tokens through educational courses and quizzes. With

a presale price of just $0.00104, it offers an affordable entry into crypto investment.

The platform‘s rapid fundraising success and strong social media presence promise

robust future growth, making it an essential resource for both learning and earning in the

cryptocurrency space.
Visit 99Bitcoins

FAQs

What is the best crypto analytics tool?

TradingView is the best crypto analytics tool, offering live trading charts, over 100,000

community-built indicators, and strategy testing features on historical data.

What is the best crypto research site?

Messari is the best crypto research site for advanced traders, providing comprehensive

market data, real-time news, and in-depth analytical reports.

What tools do I need for crypto?

Essential crypto tools include TradingView for analytics, Messari for research,

Cryptosignals.org for trade signals, Shrimpy for portfolio management, and Cryptowatch

for multi-exchange trading.

Which are the best crypto mining tools?

TradingView and Coinmarketcap are useful for crypto miners; TradingView offers market

trends and price forecasts, while Coinmarketcap helps monitor cryptocurrency market

values to identify the most profitable mining opportunities based on current prices and

trading volumes.

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational

purposes and does not constitute investment advice. You could lose all of your capital.

Share
About the Author

Kane Pepi

Kane Pepi is a financial, gambling and cryptocurrency writer with over 2,000 published works, including

on platforms like InsideBitcoins and Motley Fool. He specializes in cryptocurrency guides, exchange

and wallet reviews, and covers new crypto projects for Cryptonews.com. His expertise includes asset

valuation, portfolio management, and financial crime prevention. Pepi holds a Bachelor's in Finance, a

Master‘s in Financial Crime, and is pursuing a Doctorate in money laundering in crypto and blockchain.

Connect with Kane on LinkedIn.

More articles from Kane Pepi

About Cryptonews

At Cryptonews, we aim to provide a comprehensive and objective perspective on the

cryptocurrency market, empowering our readers to make informed decisions in this ever-

evolving landscape.

Our editorial team, comprised of more than 20 professionals in the crypto space, works

diligently to uphold the highest standards of journalism and ethics. We follow strict editorial

guidelines to ensure the integrity and credibility of our content.

Whether you‘re seeking breaking news, expert opinions, educational resources, or market

insights, Cryptonews.com is your go-to destination for all things crypto since 2017.
Top 10 Crypto Analysis Tools

That Will Make Your Life

Simpler

Articles

January 26, 2023Upd on September 3, 2023

8 min

21056

In the last 10 years, cryptocurrencies have slowly but boldly been making their

way into the mainstream. They‘ve created a fundamental shift in the way people

see and perceive value, and this has made them an incredibly lucrative

investment.

The crypto space has grown with massive communities of supporters

surrounding individual projects, with everyone always racing to get the latest

information, from long-term believers in the space to speculators and traders.

Crypto enthusiasts have continuously been working on developing and

improving their crypto analysis tools because they understand that information is

crucial to their success.

With the help of the right crypto analysis tools, anyone can get a competitive

advantage over everyone and reach market-shifting information in the crucial

moments when it truly matters.

Whether you're…

1. A beginner in the crypto space who wants to find the latest relevant news about

your favorite projects

2. A crypto trader looking for crypto data analysis tools that help them find and close

better trades

3. A seasoned investor who wants to get deep insights into projects to promote better

decision-making

This article will introduce you to the 10 top crypto analysis tools that will ease

your journey in navigating the complex world of cryptocurrencies.

How Can Crypto Analysis Tools Help You in

Your Crypto Journey?

Make Better Investment Decisions

More (useful) data means better risk management.

Whether you are looking for overall data about a specific crypto project or you‘re

into advanced technical analysis, the right analytics tool can help you make

better decisions on what (and when) to buy, sell, and hold. Some tools can

provide you with detailed chart patterns and other technical indicators.
Others will give you a bird‘s eye view of projects and their place in the market.

There‘s a tool out there to help anyone in the crypto space find the information

they need.

Stay Up to Date With the Latest News

With real-time data and live news feeds constantly helping the right information

reach you at the right time, analytics tools can be a staple in the arsenal of

every crypto enthusiast, beginner or advanced.

What‘s more, certain tools offer you the ability to set your own price alerts and

get notified, helping you be more prepared for sudden changes in the market.

More Transparency for Crypto Projects

Crypto analytics tools can provide you, the user, with important insights about

the overall status, health, and activity of a given digital asset or blockchain

network. When more information is constantly shared throughout communities,

this helps promote greater transparency and ultimately builds more trust in the

crypto industry.

They’ll Make Your Journey Smoother and Easier

The amount of information crypto enthusiasts have to learn to stay up to date

with everything crypto is overwhelming. Using blockchain analysis tools will

simplify the entire process of finding and understanding the right info, and it will
make it much easier for you to do any type of research, whether it‘s on a token,

a smart contract, or a blockchain.

10 Crypto Analysis Tools That Will Help You

on Your Journey Into Crypto and web3

#1 Messari

Messari offers data, tools, and research and serves as an online database for

the crypto industry. It provides insights into different aspects of crypto projects,

including team members, treasury information, tokenomics, communication

links, and more.

The company aims to promote transparency and better decision-making

throughout the crypto space. It equips users on an individual and corporate level

with research reports, review articles, news updates, and important intel fit

inside comprehensive dashboards.

Messari is a must for people who are building their own coin research and want

to gain an edge with pro-grade technical tools and research.

It‘s a great resource to have whether you‘re a beginner trying to navigate the

crypto market or a seasoned pro who wants to get the latest insights into

specific projects.

#2 Coin Dance
Coin Dance is a Bitcoin dynamic analysis tool backed by a lot of data. The

platform keeps track of a variety of on-chain activity metrics such as hash rates,

network nodes, block sizes, mining breakdowns, and so much more. It‘s most

often used by Bitcoin supporters who want to track specific industry analytics

over time.

With Coin Dance, you‘ll be able to get some of the most sophisticated top-level

statistics covering blockchain, search volumes, demographics, and more. The

platform is entirely community-driven, and users vote and vouch for the validity

of information.

Additionally, users can sort available data based on country and see how

Bitcoin is performing on a global and local level. The possibilities here are

endless as key locations can be monitored to gain rare insights into market

performance.

#3 CryptoQuant

CryptoQuant is a high-grade analytics tool that offers visual charts of just about

every aspect of the cryptocurrency market. While we won‘t go in-depth about its

wide variety of features, let‘s go over how CryptoQuant can be beneficial to you.

CryptoQuant helps you get vital information about the new flows of exchanges.

This means you can get a pretty good sense of whether the overall trend in the

market is buying or selling. If exchanges are increasing their net flow, this may

lead investors to think that markets will drop as users sell their crypto on an

exchange.
Using this tool will help you identify key metrics that you need to follow in your

research, and then keep you up to date with the latest information about those

metrics.

#4 DeFiLlama

DefiLlama has become the number-one source for users who want to gain

information about Total Value Locked (TVL) numbers. These are most often

blockchain users interacting with DeFi protocols and bridging over different

blockchains.

The blockchain data platform gathers data from over 100 different chains and

puts that TVL data inside easy-to-understand visuals. They value the TVL metric

because it‘s a vital indicator when evaluating DeFi protocols (and even

blockchains themselves.)

Protocols that build trust and awareness in the market usually see their TVL go

up. Naturally, this means TVL can be used as a gauge of the trust users have in

a particular protocol.

DefiLlama puts all TVL info inside an intuitive dashboard, allowing you to

browse blockchains, protocols, airdrops, and much more.

As of the time of writing, DeFiLlama tracks over 2,000 protocols and over 100

different blockchains.

#5 CoinMarketCal
CoinMarketCal is a tool you can use to get info about market events that could

possibly affect price movements. It works as an intuitive calendar that includes

updates about upcoming events related to blockchain projects.

The platform has a community-focused framework. Users can add their own

events, undergo a verification process, and put their events in front of the

community.

Overall, CoinMarketCal is a great research tool where you can explore listed

events in the crypto space and keep track of new events in real time.

Overall, CoinMarketCal is a great research tool where you can explore listed

events in the crypto space and keep track of new events in real time.

#6 Dune Analytics

Dune Analytics is an advanced crypto data platform that can be useful to

anyone who wants to get real-time information about the Ethereum blockchain.

Dune Analytics can help you analyze a particular smart contract via SQL

queries. This allows you to visualize certain information inside dashboards.

It works as a library of data about the Ethereum blockchain where users can

compile their own findings and share crucial information with each other. There

are tons of ready-to-go dashboards that help you gain insights into specific

sectors of the crypto market (APRs or daily volume of certain projects, top token

purchases, total DeFi users over time, NFT floor trackers, and countless more.)

Anyone can start creating their own queries, compile data inside dashboards,

and share it with other members of the community.

It‘s a must for anyone who is curious about learning new data on crypto and

wants to find a reliable place where data compiled by people is easily visualized

inside dashboards (and constantly updated.)

#7 DEXTools

DEXTools provides real-time insights into crypto assets. It‘s a powerful analytics

tool that leverages the native data of the Uniswap and Sushiswap DEXs. In the

future, it plans to connect to more decentralized cryptocurrency exchanges and

grow its network allowing for more data to be utilized by users.

DEXTools offers a set of key features that both beginner and pro traders can

leverage to improve their trading strategies. Using the platform, you can quickly:

1. Discover new trending tokens and digital assets

2. Track the movement of your favorite trading pairs

3. Follow the most popular swaps

4. Interact with particular crypto wallets

5. Keep a record of a token‘s live price

Some of its other advanced features include fundamental analysis and technical

analysis tools. These include liquidity monitoring, trending pools, and even real-

time graphics about crypto transactions and pair movements.

By using DEXTools, you‘ll also have the option to research and follow specific

wallets on the blockchain, giving you the ability to track activity in real time.

#8. Nansen
If you‘re a crypto enthusiast, investor, or trader, you‘ve likely heard of Nansen.

It‘s one of the most popular analytical tools crypto users have at their disposal

when it comes to analysis of on-chain data.

But the platform isn‘t just useful to crypto pros – any newbie can use Nansen to

get an overall better view of the market situation and make smarter, more

informed decisions.

With Nansen, data is presented to you inside dashboards and SQL queries that

are easy to navigate and interact with. This data is fed directly through the most

popular blockchains. These include Ethereum, Polygon, BSC (Binance Smart

Chain,) and others.

Nansen also helps you get key information about fund movement and discover

various market trends in the digital asset space before anyone else notices

them.

#9. Cryptowatch

Cryptowatch is a technical analysis tool that has core features for both beginner

and advanced traders. It‘s owned by the leading crypto exchange Kraken.

The platform allows its users to scan the prices of digital currencies, track

market movement, and even place a trade on a specific exchange. If you‘re a

trader that likes to trade on short time frames, Cryptowatch will make your life a

lot easier.
Not only will it feed you live data from over 800 exchanges, but you‘ll also be

able to design your dashboard based on the charts you truly want to see.

Overall, Cryptowatch can be an extremely powerful tool in the hands of the right

trader or investor.

#10. UniWhales

Crypto traders who want to track the activity of whales can do so via UniWhales,

a platform giving you real-time cryptocurrency transaction hash data that lets

you know when specific wallets are making big trades.

Analyzing a specific address will give you an abundance of insight into that

specific wallet, their activity, their assets, and even the individual tokens they

hold.

The platform is also community-driven, with the UniWhales DAO and the

community surrounding it doing an amazing job at curating the right information

so experienced traders and investors like you can make better decisions.

Conclusion

When you‘re trying to find the right crypto tools to help you trade, invest, and

manage your digital assets with ease, it can be easy to get lost in the variety of

cryptocurrency analysis tools right there.

Blockchain technology itself helps make data much more accessible, allowing

for the creation of these crypto trading tools and analytical tools that track

different metrics and market updates.

With on-chain data constantly available, you can see who buys what (and

when,) learn about the buyer profiles of different tokens, identify on-chain data

trends, and get that competitive edge you‘re really looking for.

Leveraging the crypto tools in this list, depending on what data you need, will

help you conduct better analysis and make smarter decisions in the future.

Finding those right tools can be one of the most important steps of your journey

into crypto investing – why not make it the first?

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