Sifting through your thousands of altcoins to select a particular investment is pretty intimidating, and with the growth of so many into the thousands, it gets even harder to figure out which is going to blow up. Most investors get surrounded by different types of noise; hence, they miss great investment opportunities often.
With the upsurge of AI and blockchain technologies, nothing else could be possible. Projects like Render (RNDR) have reportedly dramatically increased in price, leaving people to ask how that kind of success is achieved.
I’ll show you how to track altcoins before they boom and share with you a selection of tools and strategies that aided me in picking up Render when it was trading at a measly 57 cents. By the end of this, you will have a much clearer roadmap of where to look for the next ‘big thing’ in the crypto space.
The Tools I Use to Identify Promising Altcoins
Finding altcoins when they rocket is by no means easy, so here are four essential tools I use in my research:
1. Bitcoin Rainbow Chart
The Bitcoin Rainbow Chart is a visualization tool that divides Bitcoin’s price into several zones. These zones will tell you if Bitcoin is in the land of the fire sale, accumulation phase, or truly in some bubble territory. Simple yet very powerful.
For instance, if the chart labels Bitcoin as “still cheap,” it is a sign of a good environment for altcoins. The tool has proven correct time and again when it came to predicting large price movements hence making it very important during review times.
2. Altcoin Season Index
That is another strong tool: the Altcoin Season Index, and whether we are in Bitcoin season or altcoin season. When the index is low, usually, Bitcoin is strongly dominant in the market, and altcoins often suffer. And vice versa: when the index is high, it’s a signal to invest in altcoins.
Using that index for timing my entries in altcoins helps me invest during the periods when they would be able to outperform the Bitcoin.
3. Total Value Locked (TVL)
Total Value Locked (TVL) is the total value staked or locked in a particular altcoin. This measure could be used to identify whether a particular altcoin is boasting a strong community support and usage.
For example, if two altcoins have a similar TVL, but the market caps are different, I will, in most cases, favor the one which has a smaller market cap. It may be an indicator of increased potential for growth since the higher the number of investors who are attracted to it after it gains the attention of the market, the better.
4. Arkham
Arkham allows you to track blockchain addresses so that you can see the trading activity of the big players in the crypto space. For example, by looking at Ethereum developer Vitalik Buterin’s wallet, you could know the recent purchases he has made. If he’s buying a specific altcoin, then it might be worth further investigation.
The Strategy Behind My Recent Success
The Rise of AI in Crypto
What immediately caught my eye is that there was an explosion of AI technologies and companies pushing boundaries with the one at the forefront being NVIDIA. I soon realized that there was a great thirst for crypto projects that involved AI, so I started looking around to see which of these altcoins looked promising.
This is how I landed on Render (RNDR) – a prime player in the Crypto AI landscape. Investing there just as AI began its ascension into the spotlight provided an opportunity to profit from a major price appreciation.
Market Timing and Trends
I usually research the overall market condition through the Bitcoin Rainbow Chart and Altcoin Season Index prior to investing in any altcoin. From what’s mentioned above, the tool gives me the ability to understand the times at which to amass Bitcoin and the times at which to focus on altcoins.
Already now, the chart suggests we are in a great accumulation phase for altcoins, especially heading into the halving of Bitcoin. This pattern in history further reveals that prices of altcoins tend to appreciate as an investment period ahead of BTC’s halving events.
The Search for the Next Altcoin Jewel
Comparison
While hunting for promising altcoins, I usually put under comparison coins of similar TVL. For instance, if two coins have a comparable locked value but vastly different market caps, I choose the coin of the smaller market cap, as those are typically not yet in a position to have as large room to grow.
This approach has indeed worked in uncovering hidden gems within the crypto space. I keep tabs on those with solid fundamentals but lower valuations for myself to get a good likelihood of finding the next big winner.
Tracking Influencers and Large Wallets
Another way is to follow what the big players in the crypto sphere are buying. Websites like Arkham track interesting transactions from well-known investors and developers. If, for example, someone like Vitalik Buterin starts amassing a certain altcoin, I can catch on, then do my digging.
This is a combination of right tool, market analysis, and strategic timing; you’ll be searching for altcoins before they explode. Using tools such as the Bitcoin Rainbow Chart, Altcoin Season Index, TVL metrics, and influential wallets, you’ll be putting yourself in the best position possible to benefit from emerging opportunities.
Remember, there is a potential for big returns from altcoins, but risks are always involved. Do your due diligence and give some thought to your investment strategy. You would also find the next altcoin gem that would take off with the right approach and through diligence. Happy investing!