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What Are Altcoins?
Any cryptocurrency that is not Bitcoin is considered an altcoin. However, some consider altcoins to be all cryptocurrencies other than Bitcoin and Ethereum because most cryptocurrencies are branched from one of the two. The name takes origin from the fact that they are alternatives to Bitcoin and other traditional fiat currencies.
Understanding the Cryptocurrency Landscape
Before delving into specific strategies, it is crucial to have a solid grasp of the broader cryptocurrency ecosystem.
- Market Cycles: The cryptocurrency market often goes through cycles of bull and bear markets. Understanding these cycles can help identify potential entry and exit points.
- Cryptocurrency Categories
- Payment Coins: Focus on facilitating transactions (e.g., Bitcoin, Litecoin).
- Platform Coins: Power decentralized applications (dApps) (e.g., Ethereum).
- Utility Tokens: Offer access to specific products or services (e.g., Filecoin).
- Stablecoins: Aim to maintain a stable price (e.g., USDT, USDC).
- Meme Coins: Often have no or less intrinsic value. It rely on the hype and community (e.g., Dogecoin, Shiba Inu).
- Regulatory Environment: Crypto regulations vary across jurisdictions. Understanding the legal landscape is essential to mitigate risks.
Where To Look For Altcoins with Potential?
- Cryptocurrency Exchanges: Binance, Coinbase, Crypto.com
- Social Media: X (formerly Twitter), Telegram, Discord
- Data Aggregators: CoinGecko, CoinMarketCap
- Websites: Smith & Crown, Top ICO List, BitScreener
- Tools: Tools like TokenSniffer, BSCCheck, KrypyView.com help you verify the validity of a cryptocurrency.
- NFT Marketplaces: OpenSea, Rarible, SuperRare
- Decentralized Finance Platforms: These services provide methods for creating DeFi applications and might have tokens or coins available.
- Initial Coin Offerings: These are fundraising events for possible coin releases.
Steps to Identify The 100x Altcoin
Here are some key factors to consider when searching for potential 100x altcoins.
1. Market Capitalization
Market capitalization (market cap) is the total value of a cryptocurrency circulating supply.
- Low Market Cap: Generally, lower market cap coins have more potential for significant growth. However, they are also riskier.
- High Market Cap: While less likely to 100x, established coins with large market caps can still offer substantial returns.
2. Trading Volume
Trading volume refers to the total amount of a specific cryptocurrency traded within a given timeframe. It is typically measured in 24 hours. It is basically the number of coins that have changed hands in the last 24 hours.
- High Volume: Indicates strong market interest and liquidity.
- Low Volume: Can signal a lack of interest or potential for manipulation.
- Liquidity: A cryptocurrency with high trading volume is typically more liquid, meaning it can be easily bought or sold without affecting its price significantly.
3. Trading Volume/Market Cap Ratio
It provides a relative measure of how much of a cryptocurrency's total value is being traded within a specific timeframe.
A healthy trading volume relative to market cap indicates that there is genuine interest, increased demand and activity around the altcoin.
4. Exchange Listings
Listings in reputable exchanges enhances credibility and accessibility and makes it easier for traders to access the altcoin. The listing also increases the visibility and demand of the altcoin.
5. On-Chain Data
Data such as trading volume, active addresses, transaction details, holders of altcoin etc. are recorded on the blockchain. This On-chain data analysis reveals details such as coin utility and user engagement which gives an idea about long-term growth of the altcoin.
- Whale Activity: Track large wallet movements for potential indicators of market manipulation.
- Network Growth: Analyze metrics like active addresses and transaction volume.
- Token Distribution: Evaluate the distribution of tokens to identify potential selling pressure.
6. Community Sentiments and Engagement
Keep a close eye on the sentiments of the community and level of engagement of the community. A passionate and engaged community can drive adoption of altcoin.
7. Solid Team & Track Record
A strong development team and regular updates are positive signs for the growth of the project. Presence of a reputable team of advisors with track record of successful projects, is also a key factor in success of any altcoin.
8. Monitor Social Media
Monitor social media trends, forums, crypto news and celebrity/influencer mentions to track broader market sentiments to gain insight into the long-term traction and success of the project.
9. Project Fundamentals
- Whitepaper & Development Roadmap: provide insight into the project's depth and level of commitment of devs to the project.
- Use Case: A clear and compelling use case for the cryptocurrency is a crucial factor of success of the altcoin.
- Technology: Innovative technology can differentiate a project, leading to its success.
The Bottom Line
In this ever evolving crypto space, consider your financial situation to evaluate your risk tolerance before investing, do not be impulsive and fall victim to FOMO and keep in mind that investing in cryptocurrencies is often a long-term strategy. If you are unsure, before investing consult a financial advisor familiar with the cryptocurrencies to help you make a decision suitable for your portfolio.
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Hamza Malik
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