5 Technical Aspects for Cryptocurrency Analysis Prior to Investment
Tokenomics Verify the total and circulating supply, emission model (inflationary or deflationary), percentage allocated to the team and early investors, and vesting schedule. This data reveals potential sell-off risk (dump) from institutional holders.
Liquidity and Market Depth Analyze the actual traded volume on major exchanges and the depth of the order books. Manipulated projects often exhibit artificial liquidity, with significant spreads and abrupt price movements to generate volatility.
Project Validation and Real Utility (Use Case) Assess if the token has a tangible application (use case), integrations with other platforms, and if it solves a specific problem. Avoid tokens whose sole proposition is "price appreciation." Without utility, the value is purely speculative.
Development and Open Source Code Check for active repositories (e.g., on GitHub), frequent updates, and an engaged developer community. Technical transparency is fundamental for trust. Reputable projects have publicly available audits from recognized firms.
Decentralization and Governance Evaluate if the project features decentralized governance mechanisms and the degree of power concentration (validator nodes, wallets holding large volumes). Highly centralized projects are more susceptible to internal manipulation.
Caution Regarding "Trader Influencers" on Square and Other Networks! Many of these profiles present themselves as experts but are, in fact, sponsored by exchanges, funds, or token founders. Their recommendations are often market manipulation tools designed to generate FOMO and volatility that benefit their own interests. Always conduct your own analysis (DYOR) and question the motives behind every "call."
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