5 Best Crypto Research Tools For Beginner Investor in 2023
These are exciting times we live in. The new wave of blockchain technology and the crypto revolution has opened doors worldwide. As people gear up to embrace its potential, we shall see more ecosystems and applications built on this technology, which has since proved to be an investment opportunity.
In the rapidly evolving world of digital currencies, having the right research tools at your disposal can make all the difference. It is wise to be equipped with the right information before investing your hard-earned money. This is where research comes into play.
Why Research is Important Before Investing in Cryptocurrencies?
DYOR (Doing Your Own Research) is a simple but effective measure to audit a protocol/project. Research helps us understand the risk associated with the project, better understand what the particular protocol or project is doing, and identify suspicious activity that could lead to rug pulls. It is also understandable that most general public has no time to look into such projects. Let us help you understand this concept better.
DYOR can be broadly categorized based on fundamental, technical, and sentimental factors.
i) Fundamental Analysis — It evaluates a project’s foundation all the way from the technology behind it to the real-world applications. Tokenomics, the market cap, volume, and Total Value Locked (TVL) are popular fundamental indicators. The idea of a project being backed by solid fundamentals is that it will grow over time, irrespective of the day-to-day market sentiment, making it appealing to traders with long-term vision.
ii) Technical Analysis — This method is preferred by traders who intend to capitalize on short-term market movements. Traders leverage indicators to predict the price action of assets. This would also require oversight into how markets perform and understanding technical indicators like Moving Averages, Relative Strength Index (RSI), MACD, support, and resistance.
iii) Sentimental Analysis — This refers to when investors choose to trade on market sentiment. They invest in news updates, market sentiments, fear and greed indicators. Social media monitoring to help understand the level of (FUD) fear, uncertainty, and doubt helps understand if there is positive/negative sentiment surrounding a project.
We have compiled a list of essential crypto tools to help you audit crypto projects/protocols. You are also encouraged to do your own research outside of these platforms.
Top 5 Crypto Tools to Research on Crypto
Following are a few crypto tools that can help you with your research while selecting coins or tokens for investment.
DeFiLlama is a very popular and easy-to-use crypto analysis tool for understanding the foundation of a project. There are visualization tools and data to help dispel uncertainty surrounding a project. Key data points like total value locked, volume, market cap, and supply information help you understand the project’s intrinsic value. To develop an advanced understanding, you can also compare chains to check the activity and fees. An essential evaluation of the website and a run-through of the whitepaper should also serve as factors to gauge the legitimacy of the protocol.
Dune Analytics is another easy-to-use free crypto tool that helps novice investors get started. It lets anyone use analytics to publish their dashboards using blockchain data. Popular dashboards allow users to track activity using queries ranging from trending yield farms on BSC and NFT collections bought by top Opensea traders. Please remember that data reliability depends on the coder who created the query.
Bubblemaps is a supply auditing tool for DeFi tokens and NFTs. This tool enables you to investigate wallets to determine the concentration of supply and the flow of smart money. You can find this better explained if you were to check out some case studies on their platform.
Fear and Greed Index
Fear and Greed Index, as the name suggests, shows the level of fear and greed in the crypto market. An intelligent investor would buy the fear and sell the greed. Historical data indicates that if you can discipline yourself to regularly buy at desired levels of fear and sell when the level of greed increases, you will profit. This is again based on tokens that have held through with their fundamentals.
Cryptopanic is a news aggregator for traders and crypto enthusiasts focusing on price and market impact. You can track your favorite cryptocurrencies on the news and get real-time notifications. It acts as a one-stop source for all your crypto updates.
This is a household name among investors who want to do technical analysis on financial markets, whether stocks or crypto. Users must be aware of charting data using indicators like RSI, MAs, Moving Differentials, support, and resistance to predict the price pattern.
These crypto tools empower investors and traders with data-driven insights to make informed decisions, manage risks, and capitalize on opportunities in the dynamic crypto landscape. Simply put, the above cryptocurrency analysis tools make the process of researching a whole lot easier.
Having said that, if these tools appear basic, you can look further ahead. Footprint analytics and Chain analysis are some more advanced tools you can rely on to make data-driven decisions.