Today we will discuss an important topic for new traders, especially how to choose the appropriate cryptocurrencies in the appropriate way 👇
In the world of cryptocurrencies, it attracts interest not only from expert investors but also from individuals looking for new investment opportunities without previous experience, although Bitcoin #bitcoin The first currency was and still is the largest in terms of market value
Many people are shifting their investments towards cryptocurrencies in the hope of making profits in the process. Although there are risks, a carefully thought-out plan can help you grow your investments. We take a look at the most important digital currencies to focus on when investing in 2024.
However, the market witnessed the rapid emergence of many alternative currencies such as Ethereum (ETH) and Ripple (XRP) Solana $SOL
And new currencies and meme coins such as #portal , $MANTA , #pepecoin🐸 and #bonk
Today, there are more than 15,000 cryptocurrencies, many of which lack a clear future vision. Therefore, it is important to learn how to distinguish between rising currencies so that you can make informed investment decisions based on strong and appropriate foundations.
The most important strategies for choosing a currency 👇
Check the project website
Any cryptocurrency worth your time should have a website. Nowadays, creating a website is very easy and any person or company that is serious about its business will have an updated, attractive and informative website.
Things to look for in a cryptocurrency website:
- It should be up-to-date and easy to browse
- Clean and free of spelling errors
- Reveals the team and all partnerships
- Define a step towards the goal and a clear path
- Provides a white paper
Secondly, read the white paper 💥
It is very important that if there is no white paper, this is a big warning sign, and a reliable white paper must be free of spelling and grammatical errors.
A digital currency whitepaper is an essential tool for evaluating a project, defining goals and strategies, and providing a clear roadmap. It includes details such as token distribution, supply limits, and token issuance and burning processes if part of the cryptocurrency ecosystem.
Third, audit social media channels such as Twitter and Discord
To get acquainted with a cryptocurrency community, it is important to visit its social media accounts and check the interaction there. Here are some important points that can help you assess the situation:
Number of followers and engagement: Check the number of followers of accounts on platforms like Twitter, Discord, and Reddit. The number of followers can be an indicator of the popularity of a project. There is also a need to review engagement in the form of comments and shares to ensure that the audience is active and interested.
Community moderators and their responsiveness: Check if community moderators are actively responding to questions from users and investors. If important questions are ignored or unsatisfactory, this may be a negative sign.
Promote news events and participate in discussions: Active attendance at news events and active participation in discussions on platforms like Discord can suggest the strength and openness of a project.
Detect Fraud and Manipulation: Avoid getting involved with groups that use exaggerated sales tactics or promise unrealistic returns. Strong projects usually don't need such tactics.
Community Assessment: A general search across social media to identify discussions and posts about the cryptocurrency. Overall positivity may indicate buying momentum and interest from investors, while significant negativity may be a warning sign.
In short, understanding the dynamics and interactions on social media can help you assess the health and strength of a cryptocurrency community before investing in or engaging with it.
IV Analysis of the project team and partnerships
To evaluate the success of a digital currency, you need to check several important aspects, as I mentioned:
Core team and thought leadership:
Founders and Key Members: Find information about the people behind the project, and learn about their work and academic track record.
Experience in the field: It is preferable that the team have previous experience in the field of blockchain and launching successful digital currencies. This enhances confidence in the team's ability to achieve project goals.
Partnerships:
List of Partnerships: Check the site's home page for announced partnerships. Partnerships with well-known companies such as Google, Amazon, JP Morgan, Visa, IBM could be a positive sign if validated.
Verify partnerships: Big names may be used to attract investment, so you should verify the reality of these partnerships and their actual impact on the cryptocurrency project.
Evaluating digital currency market indicators
To verify this information, you will need to visit CoinMarketCap. What distinguishes the novice investor from the professional investor is a working knowledge of these three basic market indicators.
- Market value
- Trading volume
- Display indicators
Studying price history is important
In addition to understanding market indicators, you should always note the price history of a cryptocurrency. The cryptocurrency market is volatile, so it is normal to see price fluctuations, but look for a gradual increase in price over time. It is wise to monitor the price over different time periods, including viewing the full history to get as broad an understanding as possible of the long-term and short-term price trends.
Avoid currencies that experience exaggerated rises followed by sudden falls, as this can indicate a “pump and dump” scenario – a scam in which the price of a coin is inflated due to false hype and then immediately sold for a profit.
Determine whether the digital currency has utility
Not all cryptocurrencies have a practical purpose. Look for currencies that offer interest in the blockchain system. Is the currency project seeking to solve a problem within the network or improve its functionality?
Important advice for investors
Those who intend to enter the digital currency market need to be aware of the significant risks associated with this type of investment. Here are some key points for investors to consider:
Prepare for fluctuations: The digital currency market is known for its large price fluctuations. Investors must be prepared for these fluctuations and bear potential losses.
Reevaluation based on analysis: Instead of reacting with panic when volatility causes significant price changes, investors should use these opportunities to reevaluate their investments based on a thoughtful analysis of available information.
Risk Awareness: It is wise to educate the investor that investing in digital currencies involves high risks, and he must be prepared to lose part of the capital.
Research and Consultation: Before making any investment decision, an investor should conduct careful research and consult a financial advisor if necessary. This helps increase the chances of choosing the right digital currencies and reduce risks.
In conjunction with these tips, the investor can better benefit from the digital currency market and increase the chances of success of his investments
Don't forget to visit the link 👇
