Basic Steps Before Buying a Newly Listed Coin on Binance When it launches 🔥
When a new token is launched on Binance or any major exchange, it can be tempting to jump right in. However, making informed decisions is key to avoiding unnecessary risks and losses. Follow this step-by-step strategy to evaluate a coin before you decide to trade or invest:
1. Research the sale before launch:
Start by checking whether the token has undergone any initial coin offerings (ICOs), pre-sales, or private sales. If so, determine the pre-sale price and compare it to the expected listing price. Tokens that have achieved significant traction prior to launch often see early investors quickly sell their holdings to secure profits.
2. Understand the supply dynamics:
Discover the total supply and circulating supply of the token at the time of launch. The total supply represents the maximum amount of tokens that will exist, while the circulating supply reflects the number of tokens currently available for trading. The presence of a relatively high circulating supply compared to demand can exert downward pressure on the price.
3. Determine the project's scope:
Determine the project's focus. Is it part of a popular narrative like artificial intelligence, gaming, layer 1 or 2 solutions, the metaverse, decentralized finance, or another field? Projects associated with current hype cycles may experience initial spikes but can lose momentum once attention shifts.
4. Launch price gap analysis:
Once the token is active, compare the launch price with the initial public offering or the presale price. If the price increases significantly above the presale value, this indicates a high probability that early investors or participants giving away tokens will start selling their tokens to take profits.
5. Market value assessment:
Look at the market value of the coin at the time of launch. If it is exceptionally high (say over $300 to $400 million), it indicates limited short-term growth potential. Coins launching with inflated valuations often attract sellers instead of buyers, leading to rapid corrections.
6. Avoid overexposure:
Make sure that the token price remains reasonable compared to its valuation at the IPO. Ideally, the market capitalization should stay below $400 million. If the price rises too quickly, it becomes risky, as intense selling pressure can lead to sharp declines.
7. Check existing trading activity:
Find out if the token was recently launched or is trading on other exchanges. Coins that have already been traded may have established price patterns, reducing uncertainty created by initial volatility.
8. Giveaway or incentive survey:
Determine if the project has distributed free tokens through giveaways or promotional events. Recipients of the donations often sell their tokens as soon as trading opens, leading to a flood of sell orders and causing prices to drop.
Final thought: Should you buy immediately?
My advice: avoid chasing the coin immediately after the launch. Here's why:
Newly launched tokens are highly volatile and often overvalued due to hype and the fear of missing out.
Monitor the price action for hours or even days. Let the market stabilize and a base price form.
Buying at a high price can lead to significant losses as early investors sell their holdings.
Instead, be patient, monitor market behavior, and wait for a clear trend or solid entry point. Making a calculated decision will give you better chances of long-term profits.
In trading, patience is more rewarding than impulsive decisions. Trade