5 notes to “Follow” the market for effective investment

June 6, 2022 - Around 6 mins mins to read

Following the market is an excellent way to recognize and avoid panic when the market fluctuates. So how do you capture the trend and rhythm of the market? This article will mention 5 things to keep in mind when you follow the market.

Why Follow Crypto Market?

The everyday psychology of many people when participating in the cryptocurrency market can be “immersed” in the feeling of sublimation when the coin pumps and “swallowed bitterly” each time the asset is divided. So to avoid getting FOMO, FUD syndrome as mentioned in another article of Coincu News, you need to keep an eye on the market.

Following the market here is observing the parameters, on-chain, and other data such as liquidation rate, percent volatility of coins, and tokens during the day. Specifically, attention should be paid to the following factors:

Trend: A general trend or behavior that a group or part enthusiastically responds to. The most prominent trends are NFT, DeFi, Web 3.0, and currently the trend of other newly developed ecosystems (Cosmos, Starknet, ZKSync, …)

Market Sentiment: Expressing the general attitude of investors about the market, this term is used extensively for many types of financial markets. Some other comments say that a price increase indicates increased market sentiment (investors) and vice versa.

Money Flow: Calculated by averaging high and low prices (close and open) multiplied by daily volume. Positive cash flow means positive and vice versa.

5 notes when following the Crypto market

Subscribe to forums in Crypto

If you are entirely new to the market, what do you look for first?

The vast majority of people will go with a trend or an appreciated project. So how do we evaluate that project without following other people’s judgments? It is all based on learning the details of the project and following all the official media pages from the project you are interested in.

The benefits received here are real insights from the project, new plans (roadmap), and opportunities (airdrop, incentive, retroactive) – instead, a long-term benefit.

We may track information from sources such as:

Portal: Telegram, Twitter, Facebook, Discord.

News update website: Coindesk, Medium, Bloomberg, Forbes, The Block, Coincu News,…

Other on-chain aggregators: Coingecko, Coinmarketcap, Cryptoquant, Coinglass, Coin98 Markets, Debank, DefiLlama, DeFi Dashboard,…

Following the Footprints of “Fish” (Investment Fund)

Following the fish’s footprint is a very technical term in the community, showing the investment tracking of the “big guys”. The big guys I want to mention are investment funds, investment institutions, and other retail investors.

Every day, there will be many projects calling for capital with many everyday purposes and goals being to develop the platform. Most fundraising projects are usually new projects, or in the construction process, and of course, this project will have a lot of potential for investors.

However, new projects will need a lot of capital during the formation process, so they often open funding rounds from many different funds to track how much those projects have raised and what funds stand. Then you need to keep track of infographics, articles about them, follow on-chains,…

Can track data statistics websites such as Dovemetrics, Chainbroker, and Crunchbase. It should be noted that the fundraising information for us to classify the group of projects is not a decisive factor for investment selection.

Observe the activities of the KOLs

The term KOL is an acronym for (Key Opinion Leader), those who influence a particular field. Usually, what KOLs share, their comments will have more or less impact on the decisions, behavior, or views of followers (fans).

In other words, KOLs will influence the community (specifically their area of expertise). There will be 3 main groups of KOLs such as:

Celebrity: People who are famous as artists.

Influencers: People who inspire by sharing information.

Mass Seeder: People with influence in a smaller range than the above two groups.

In Crypto, there will be a specific group/person with influence, and most of their words and actions will have a more or less impact on the market, more specifically the value of the coin/project. A few famous people I would like to mention are Changpeng Zhao (CZ) – founder and CEO of Binance, which is the largest exchange in the world by trading volume, and Sam Bankman-Fried – founder of the exchange FTX translation.

In addition, you can follow other billionaires via their Twitter. I have suggestions below; you guys can refer to:

Roham Gharegozlou – CEO of Dapper Labs
Jack Mallers – Founder and CEO of Strike
Andre Cronje – Founder of Yearn Finance
Elon Reeve Musk FRS – Entrepreneur, executive founder of many famous brands such as PayPal, Tesla, and SpaceX, … and also a pioneer in favor of Dogecoin
Nguyen Thanh Trung – CEO of gaming Play-to-Earn Axie Infinity

Update ecological overview

After following projects and voices in Crypto, monitoring ecosystem updates is a must to follow up and go deeper. Usually, the information coming from new puzzle pieces on the system and the integration with partner projects will be updated.

First, it is necessary to determine the ecosystem to monitor so as not to miss information and opportunities. Create yourself an overview management sheet to observe. Examples of the following ecosystems:

Solana Ecosystem (SOL) with Solanians
Terra Ecosystem (LUNA) with Terrians
Near Ecosystem (NEAR) with Nearians
Dfinity Ecosystem (ICP) with Dfinians
Cardano Ecosystem (ADA) with Cardians
Avalanche Ecosystem (AVAX) with Avaxians
Fantom Ecosystem (FTM) with Fantomians
Fantom Ecosystem (BNB Chain) with World of Binancians

Observe On-chain metrics

On-chain data is data located on the blockchain, and it reflects block data (time, fees, miners, etc.) and smart contract interactions (add liquidity, …) in the blockchain.

Since the transactions will be verified by the Nodes and updated to the network, and the blockchain is a Decentralized (decentralized) network, operations will be based on many Nodes, like Bitcoin, which has up to 11,558 nodes. Ethereum has more than 8,000 nodes, and data is shared widely so that no one can manipulate and modify this data source.

Advantages of On-chain data analysis:

– Get the most accurate information going on in the market.

– Monitor the market behavior at that time.

– Help forecast and make investment decisions.

Disadvantages and also notes when you analyze data:

– Because this is an intensive tool, it requires users to have knowledge and judgment when updating data.

– It is necessary to compare information and data from many different On-chain sources before making final results/assessments.

– For the data from the project’s website, sometimes the numbers will not be completely accurate. We can check it on the blockchain explorer before referencing it.

– Update information regularly, as the market will constantly change so please regularly update by reloading the page or comparing data with other on-chain tools.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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5 notes to “Follow” the market for effective investment

Why Follow Crypto Market?

Money Flow: Calculated by averaging high and low prices (close and open) multiplied by daily volume. Positive cash flow means positive and vice versa.