Your role on a crypto market
- There are different types of investors; long term and short term (hodlers and traders)
- Bitcoin is more like gold
- traders are short term investors and they don’t care about the thing they invest it, they care about the price range(?)
- Gold you should buy long
- When the investor bought BTC while it peaked, on average it took 3 years to break even (historically)
- It does not mean it will be like that forever
- Because bitcoin is very volatile, it attracts quite a lot of traders. Those traders are not interested in normal prices
- New people that start buying crypto, start with trading and then they loose money
- 66% of day traders quick tradigin within a year
- 76% drop out by 2 years and only 15% survive
- Active traders udnerporfowm by 6.5% which means that they usually would be better off hodling
- 95.3% of unprofitable day traders continue to day trade and they don’t understand that they are not good day traders
- If you react emotionally while investing, it means that you haven’t made a decission what kind of investor you are
https://www.lookintobitcoin.com/charts/puell-multiple/
https://unchained.com/hodlwaves
https://bscscan.com/
How to choose projects that you want to invest in
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You should check fundamentals of every project you invest in
- Check active addresses
- For checking taht, you can use explorers, Crypto Quant, Glass node, C98, messari, Look into bitcoin, the B)
- Explorers are tools that help you all transactions and lots of different details
- For checking taht, you can use explorers, Crypto Quant, Glass node, C98, messari, Look into bitcoin, the B)
- By checking active addresses, I can learn whether or not there’s development on that blockchain and I should compare it with previous bessa to now. If there are more addresses active than before, it means that there’s more users using it
- Volume (A measure of how much of a cryptocurrency was traded in the last 24 hours.)
- you can check that at Coingecko or CoinMarketCap
- During bessa, if project has ~ 100 mln usd volumen, it is a good signal
- Github activity
- historically, those cryptos that have greater activity, have a higher chance of surviving
- The amount of cryptos that are being pulled out of the marketplaces
- most cryptos are inflationary and if there’s quite a lot of them being sent to private wallets, it is a good sign
- https://cryptoquant.com/asset/btc/chart/exchange-flows/exchange-reserve
- Social Media Activity
- how often they post on social media
- how people react to those posts, whether they comment, like, share etc.
- Roadmap, utility etc.
- Check active addresses
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Once the above is done, you have to figure out the value zone
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How to check the value zone
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Value zone is a value from which we want to invest in a particular coin from
- One of the first things to check is drawdown
- Drawdown is the % value from ATH to current price
- It is useful to check BTC+Coin pair as well as USD+Coin pair
- MA, RSI etc
- One of the first things to check is drawdown
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Strategies
- DCA - It helps to average the price of crypto
- When project has 5/5 or 4.5/5, it means that is a good long term project and it’s worh investing
- Below that is is something worth investing, but smaller amounts
- 10% of portfolio for risky investments
Development data - The true value of cryptocurrencies
- Compare projects (ETH vs Cardano for example)
- Check github activities
- No of apps built on blockchain
- Unique wallets