Selecting financial instruments that can deliver an excellent performance in the crypto market is incredibly difficult. The sheer variety of digital assets available for purchasing is astonishing to a newcomer. The total number of digital currencies is unknown, but the UK’s Financial Conduct Authority estimates that there are at least 20 thousand of them. In March, 2024, there were 13,217 tracked tokens.
Trying to figure out what crypto coin to buy is a tough task even for veterans. A typical crypto enjoyer defaults to buying mainstream coins. These have an established role in the crypto market, namely Bitcoin, Ethereum, Polkadot, Tether, and others. However, that is not enough for us to have more variety to diversify, amplify profitability, and trade efficiently.
The diversity of options in the crypto market makes the importance of continuous education and research in crypto investing a top priority for any investor. Hopefully, this article will provide you with some food for thought and investment ideas that can be turned into a money-making strategy. However, we have to remind you that we do not give financial advice and encourage all our readers to do their own research.
Just like many other financial instruments, digital assets have their metrics and can be evaluated. At the same time, many fundamental analysis tools do not work here due to the absence of real assets, staff, physical products, and other factors that allow investors to make decisions in traditional markets.
One must remember that all digital assets are inherently volatile. Even stablecoins fluctuate all the time. Average 30-day Bitcoin volatility against the US dollar was close to 62% in January 2025. Compare it to the average 30-day S&P500 volatility which is only 17.38% despite the tumultuous period in the US economy. The difference is staggering.
Bitcoin is one of the most reliable and stable of all digital assets and it still fluctuates way stronger than many stock indices. Fundamental and technical analysis does not work in tandem in the world of crypto. One must focus primarily on the latter. We won’t be focusing on technical analysis instruments and tools as they are good tools for intraday or short-term trading. Instead, we will talk about metrics that are great for evaluating cryptocurrencies for long-term DeFi investments.
The total market cap is defined as the product of multiplication between the price per unit and the circulating supply. Market capitalization is a good indicator of the dominance of any given crypto and its share of the market. For instance, Bitcoin Dominance is a technical indicator that compares the market cap of BTC to the combined market cap of the next 50 biggest coins.
Here are some numbers:
Naturally, investors feel more comfortable investing in cryptocurrencies that have higher market capitalization and trading volume. The latter is the total value of all coins exchanged within a certain period. The latter is the best indicator of trader activity. The 24-hour trading volume of Bitcoin is over $23 billion.
Price action is the measurement of change in the price of an asset over time. Using chart analysis for price prediction is a good way to assess the performance of a token. One of the best tools available to retail traders is the TradingView platform. It is a smart terminal that pulls data from a variety of centralized and decentralized exchanges.
Here, you can use all sorts of technical indicators. Power users create complex strategies that can be used by anyone. While there are some paid tools, the vast majority of useful indicators and analytical systems are free even if you don’t pay for the subscription.
Price gains over long periods can be a good indicator of health. For instance, Bitcoin broke through the $100,000 resistance level at the end of 2024. It was a glorious moment for many enthusiasts, but this spike was the culmination of a decade-long journey from $380 in 2015 to over $106,000 in 2024.
One must never forget the news impact on cryptocurrency prices which can be massive. We strongly recommend staying in touch with the market and its current trends if you want to react to potential changes in price action in a timely fashion.
All digital assets have underlying infrastructures. The performance of blockchains is just as important as other factors. There are several key metrics that you should be looking to evaluate the reliability and long-term prospects of any given coin:
One must understand that the crypto ecosystem is not a static environment. Even Bitcoin, one of the most rigid blockchain systems out there, is evolving and adapting constantly. It is important to take into consideration how technological advancements are changing the landscape of cryptocurrency analysis.
Social media sentiment is very powerful in the world of crypto where most assets are purely speculative. Narratives can make or break a new project and suffocate its tokens early. According to Smart Insights, over 63% of the global population uses social media. Close to 54% of all US adults use them as news sources.
Social media’s influence on crypto trends is impossible to ignore. The famous tweet from Elon Musk in 2021 sent DOGE soaring through the sky. It gained over 300% in just 4 hours.
There are many ways to gain insights from social media. You can join communities on Reddit, Discord, or Twitter. Following influencers who regularly post valuable tips and insights is also a good idea. Alternatively, you can visit Rivo and talk to the Maneki AI agent that analyzes social media sentiment, creates educational content, provides information on DeFi protocols, helps users familiarize themselves with the sector, and does all sorts of other great things!
Selecting good cryptocurrencies to invest in is a challenging task even for experienced investors. One must consider a variety of factors including the impact of regulatory changes on market trends and coin selection. For instance, XRP, USDC, and some other coins are fully compliant with the US and EU regulations while others, such as Monero, are still in the dark gray area.
It is hugely important to track adoption metrics, attentively vivisect tokenomics, be aware of developer activity, and regularly check staking and yield statistics. These should be analyzed on top of all the things mentioned previously.
Learning how to stay updated on emerging trends and tools for analyzing cryptocurrencies is incredibly important for all contemporary crypto investors and enthusiasts. If you are interested in building a balanced portfolio that corresponds with your preferences and risk tolerance, it is an excellent idea to visit the yield marketplace at Rivo.
Here, you can browse a massive selection of strategies that were picked by professionals and verified by a team of dedicated specialists to ensure that featured projects have legs, adhere to high-security standards, and are capable of delivering on their promises. Get started now and build your perfect portfolio with Rivo!
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