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John Martin 16 Feb 2024 ◦ 11 min read

Essential Tools for Crypto Analytics And Crypto Research

Essential Tools for Crypto Analytics And Crypto Research

Cryptocurrency is a fast-paced and ever-changing phenomenon. With new coins and tokens introduced regularly, it can be difficult to keep up with the latest trends and market movements. This is where analytics and research have been conducted. By utilizing the right tools, investors and traders can gain valuable insights into the cryptocurrency market and make informed decisions about their investments.

Fundamental Analysis Tools

Fundamental analysis is the process of determining the investment attractiveness of an asset by examining its key qualitative and quantitative characteristics, such as financial and economic data, industry trends, business models, quality of management, usefulness, level of supply and demand, implementation, regulation, and competition

An analysis of these factors can help determine whether an asset is overvalued or undervalued, that is, whether it has strong or weak investment potential.

In the context of cryptocurrency, fundamental analysis usually includes an assessment of the underlying technology, supply and demand factors, the community and its ability to innovate, market capitalization, circulating supply, total supply, transaction volume, network activity, number of active wallets, hashing, mining complexity, and other metrics specific exclusively to cryptocurrency projects.

CoinMarketCap

CoinMarketCap is a world-renowned cryptocurrency price monitoring tool. The site, founded in 2013, is user-friendly and contains a list of the top 100 cryptocurrencies by market capitalization. Each digital currency includes data, such as current market capitalization, price, 24-hour trading volume, turnover in circulation, percentage change in value over the previous 24 hours, and a seven-day price chart.

Information about individual cryptocurrencies includes historical performance charts for various periods, the total supply, etc. A breakdown of trading pairs, 24-hour volume, and current prices on different exchanges is especially useful.

Investors can also compare currency prices on several exchanges simultaneously to determine the best option to buy or sell. Moreover, CoinMarketCap lists lesser-known digital currencies, in addition to the top 100 digital currencies.

Coinlib

Coinlib may be a lesser-known price-tracking site, but it includes several useful tools in addition to the basic price-monitoring system. For example, a comparison tool that allows users to view statistics for four coins or tokens simultaneously. It also offers the best price analyzer that helps investors identify arbitrage opportunities and exchanges that can offer them the highest price.

Coin360

Coin360 is a highly interactive platform that allows us to track the capitalization of the cryptocurrency market, exchange performance, and price fluctuations. This is the ideal universal resource for cryptocurrency lovers. Whatever digital coin you are interested in, you can track it in real time using the automatic ecosystem update feature anytime and anywhere.

Coingecko

Coingecko is another popular cryptocurrency-tracking website. It offers similar features to Coinmarketcap but also includes additional metrics such as developer activity, community interest, and liquidity. Coingecko also provides a "Trust Score" for each coin, which takes into account factors such as liquidity, trading volume, and community feedback.

Blockchain Explorers

Blockchain explorers are tools that allow users to view the details of individual transactions in a particular blockchain. This can be useful for investors looking to track the movement of large amounts of cryptocurrency or verify the authenticity of a particular transaction. Popular blockchain explorers include Blockchain.info, Etherscan, and Blockchain.

Technical Analysis Tools

Technical analysis of cryptocurrencies is an assessment of the current volatility of the cryptocurrency market and the identification of market shifts and breakthroughs. Technical analysis requires an understanding of all the intricacies of charts, digital currency data, and cryptocurrency market trends. Simply put, investors tend to buy when the market is at its lowest and sell when it reaches its maximum. As in traditional trading, time is a crucial factor for cryptocurrency traders.

A thorough technical analysis of the crypto market is one way to determine if you are investing at the right time. "Is the coin price still too high?" or "Will it go lower?" are the questions you need to ask yourself when analyzing the data. Technical analysis is based on the idea that markets behave by trends that repeat over time. The purpose is to identify these fluctuations and predict future market trends. The forecast allows the trader to buy and sell at the appropriate time.

Crypto Indicators

An effective market analysis can be performed using crypto indicators. From candlestick charts and trend lines to support resistance levels, there are various charting tools at your disposal. Let us look at visualization tools that help a trader stay up-to-date with the ever-changing realities of the crypto markets.

Candlestick Charts

One of the most popular tools among traders is the candlestick chart. They allow us to gain a deeper understanding of the general behavior of the market. Candlestick charts show the highest and lowest price points of crypto charts, simultaneously showing the opening and closing prices in the selected time interval for analysis, from 10 min or 12 hours to a day or a week.

The bodies of the candles are colored green or red. Green indicates that prices ended the day higher than when they opened, while red indicates that prices ended the day lower than when they opened.

Candle wicks were a source of additional information. They show the ups and downs of the market over a selected period. Thus, the wicks suggest the interaction of sellers and buyers and also demonstrate the attempts of the market to break through. In general, the body of the candle indicates fixed opening and closing prices for a certain period, and the wicks show unsuccessful attempts to set price benchmarks (points).

Trend Lines

Technical analysis is based on past trends, which is a factor that is important for understanding. Previous results do not always reflect future results. Trend lines were created by drawing a single line connecting the different high and low points. Ultimately, the more price points you connect, the stronger the trend and the easier it is to identify and navigate potential future market trends.

Support and Resistance Levels

Support and resistance levels are indicators for determining the key entry and exit levels. They show where the market has reached its past peaks and troughs. Trend lines allow us to determine whether the market is trading within a certain range or showing signs of a directional trend. Many traders use Fibonacci retracement and extension levels to determine the levels at which a trend can be targeted, or the levels at which a trend can potentially form a reversal pattern.

Moving Averages

Another tool for determining likely trends in the cryptocurrency market is moving averages. They track the average price of a crypto asset over a certain period. The longer the time interval, the greater the mitigation of daily fluctuations.

However, it would be incorrect to exclude short-term moving averages, as they have also proven their effectiveness in the crypto community. You can set moving averages of various lengths, with some of the most popular periods ranging from 10 days to 200 days.

Moving averages were created by dividing the number of data points for a selected period by the sum of each data point. This information gives traders an idea of the direction of market trends.

Sentiment Analysis Tools

Market sentiment analysis is a technique used to evaluate the emotions, attitudes, and opinions of traders surrounding financial assets, such as cryptocurrencies. It helps determine the majority opinion that drives the market and can significantly impact the price of any digital asset. Understanding crypto-market sentiment is essential for improving trading and investment decisions.

Combining market sentiment analysis with technical and fundamental analysis can provide a complete picture. However, it is important to note that positive market sentiment does not always guarantee market growth and that market sentiment alone may not tell the whole story. 

Social Media Platforms

To perform crypto-market sentiment analysis, traders should gather various views, opinions, and ideas from relevant social media platforms, such as Telegram channels, Reddit discussions, Discord, and official project forums, or the Bitcoin Crypto-Fear and Greed index, which aggregate various sources to summarize the current market sentiment.

News Aggregators

News aggregators such as CryptoPanic and CoinSpectator are also useful tools for sentiment analysis. These platforms aggregate news articles and blog posts from a wide range of sources, allowing investors to stay up-to-date on the latest developments in the crypto space and identify potential market-moving events.

However, there is no universal solution that always allows traders to rate market sentiment correctly, but in combination with a properly conducted technical and fundamental analysis of the market, an assessment of market sentiment can significantly reduce the chances of making a mistake.

Research Platforms and Apps

In addition to the aforementioned tools, a wide range of research platforms and apps are available for investors and traders. These platforms offer various features, including portfolio tracking, price alerts, and analytics dashboards. Popular research platforms and apps include Blockfolio, Delta, and CryptoCompare.

Conclusion

While many traders use sentiment analysis in the investment market, it can be especially useful in the cryptocurrency market. Because the blockchain industry and crypto markets are still relatively small, public opinion and sentiment can cause significant price fluctuations.

 Using the described methods, you will be able to analyze market sentiment and make informed investment decisions. To start analyzing market sentiment, we try the following:

Keep track of opinions about a particular project on social networks.

Stay up-to-date with the latest industry news and upcoming events.

Use indicators that will help you better understand the public's interest in cryptocurrencies.

The longer the application of market sentiment analysis, the more accurate the result will be; however, in some cases, the market may behave unpredictably and fail to meet forecasts. Therefore, being careful in matters of trading, investing, and remembering every decision involves a certain risk.

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