How to conduct a basic analysis of cryptographic investments
The world of cryptocurrency has exploded in recent years, and prices will increase rapidly and will fall at any time. As a result, investors are increasingly looking for reliable methods of assessing possible investment efficiency. One of the important aspects of the basic analysis is the identification of basic drivers that affect the movement of cryptocurrencies.
In this article, we consider the basics of cryptocurrency investment, focusing on basic analysis. By understanding key factors on the market, you can make more conscious investment decisions and maximize returns.
What are the basic factors in placing encryption?
Before immersing yourself into specific features of basic analysis, you should understand what leads to the displacement of encryption currencies. The main drivers are:
- supply and demand : The balance between buyers and sellers defines a general trend on the market.
- Institutional support : The largest institutional investors, such as hedge funds and family offices, may have a significant impact on the market.
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- Regulatory environment : cryptocurrencies surrounding politics and governmental regulations can significantly affect their implementation and value.
- Network effects
: When more users are associated with a specific cryptocurrency, its value increases due to the number of potential users.
Step by step guide after a basic analysis of the encryption investment
Now, when we identified the most important basic factors that direct the price movement in cryptocurrency, a step -by -step guide after basic analysis:
- Examine and understand cryptocurrency
* Check white, team, progress plan, progress plan and current market position.
* Check the use of cryptocurrency, tokenomics and all applications.
- Rate the programmer team and project administration
* Assess the experience and experience of key members of the group, such as advisers, programmers and auditors.
* Check the administration structure to ensure transparency and responsibility.
- Rate market opinions and adoption degrees
* Analyze internet forums, social media and information agencies to measure market opinion.
* Assess the level of institutional support through the main exchange companies or increased risk capital.
- Analyze the regulatory environment and compliance
* Principles and provisions on research administration that affect your region on cryptocurrency.
* Find signs of regulatory departments for specific projects or markets.
- Rate network effects and scalability
* Assess the network capacity to support a large supply of users, including scalability and security properties.
* Check the project’s ability to maintain a competitive advantage.
- Rate the market ceiling, price and variability
* Compare the market for former industrial peers to measure relative values.
* Analyze price variability using technical indicators such as RSI or Bollinger belts.
Tools for conducting basic analysis
To facilitate the basic analysis, consider the following tools:
- Cryptocurrency exchange platforms : Use these platforms for exploration and analysis of market information, trends and emotions.
- Blockchain analysis software : lever tools such as Coinmarketcap, Cryptoslat or Blockgeuse to obtain information on market dynamics and project performance.
- Financial news points : be up to date with industrial news and reputable sources such as Cindesk, New York Times or Bloomberg.