When a new token is launched on Binance or any major exchange, it can be tempting to jump in. However, making informed decisions is key to avoiding unnecessary risks and losses. Follow this step-by-step strategy to evaluate the coin before you decide to trade or invest:
1. Research the sale before launching:
Start by checking if the token has had an ICO, presale, or private sale. If so, determine the presale price and compare it to the expected listing price. Tokens that have gained significant traction before launch often see early investors quickly sell their holdings to secure profits.
2. Understanding the dynamics of the offer:
Find out the token’s total supply and circulating supply at launch. The total supply represents the maximum number of tokens that will ever exist, while the circulating supply reflects the number of tokens currently available for trading. Having a relatively high circulating supply compared to demand can put downward pressure on the price.
3. Determine the scope of the project:
Define the focus of the project. Is it part of a popular narrative such as AI, gaming, layer 1 or layer 2 solutions, metaverse, decentralized finance, or another area? Projects tied to current hype cycles may see initial increases but may lose momentum once attention shifts.
4. Launch Price Gap Analysis:
Once the token is live, compare the launch price to the IPO price or presale price. If the price rises significantly above the presale value, it indicates a high probability that early investors or gifting participants will start selling their tokens for a profit.
5. Market value assessment:
Look at the coin’s market cap at launch. If it’s exceptionally high — say, over $300 million to $400 million — it indicates limited potential for short-term growth. Coins that launch at inflated valuations often attract sellers rather than buyers, causing rapid corrections.
6. Avoid over-entry:
Make sure that the token price remains reasonable compared to its IPO valuation. Ideally, the market cap should remain below $400 million. If the price rises too quickly, it becomes risky, as heavy selling pressure can lead to sharp declines.
7. Verify existing business activity:
Find out if the token is newly launched or is already trading on other exchanges. Coins that are already trading may have established price patterns, reducing the uncertainty caused by initial volatility.
8. Survey of donations or incentives:
Determine if the project has distributed free tokens through giveaways or promotional events. Recipients of giveaways often sell their tokens as soon as trading opens, causing an influx of sell orders and dragging prices down.
Final Thought: Should You Buy Right Away?
My advice: Avoid chasing the coin immediately after launch. Here's why:
Newly launched tokens are highly volatile and often overpriced due to hype and the desire not to miss out.
Watch the price action for hours or even days. Let the market settle and a base price form.
Buying at a high price can lead to large losses as early investors sell their holdings.
Instead, be patient, watch the market behavior, and wait for a clear trend or strong entry point. Making a calculated decision will give you a better chance of making a profit in the long run.
In trading, patience is more rewarding than impulsive decisions. Trading