Since this round of market, the performance of various coins in the market has been somewhat disappointing, especially some previous value coins and this year's VC new coins, which have fallen again and again. Value coins are dead, and the voice of meme is always profitable. Everyone says that fundamental analysis is basically unprofitable, and looking for fundamentals in the currency circle is like looking for love in a foot massage parlor, but I think this is really important.
First of all, it may depend on how you define fundamentals. Today, I will share with you two good dimensions that I have seen (trader Jason).
Looking down means to make sure that the floor under my feet is solid, or at least not a floor that will fall off after a few steps, so I must first check how strong the support of this project is. Even after buying it, even if I make a mistake, it will not fall too much, or even return to zero. I must ensure that the coin I buy does not have a particularly large downward space.
To elaborate, for a project, excluding MEME coin, we will call it value coin. The first thing is to look at its organization. Although everyone has a lot of emotions about this round of VC, I think at least a good VC, a powerful VC, has helped you screen the team of this project, knows what this project is about, and has checked the entire project. In addition, a powerful VC has a certain bottoming ability. As long as this VC has not completely withdrawn, it must also be responsible for its own price.
The second is whether the project's business data is strong enough. For example, for a DeFi project, I will directly look at its TVL and transaction volume. If it is an Infra project, I will look at its ecosystem, how many projects have connected to it, how many requests it may have made on the chain, etc. I want to make sure that this project is not a dead shell project and that it is still doing things.
The third is that fundamental analysis and K-line analysis do not conflict. K-line analysis is also a type of fundamental analysis. Fundamentals is a very broad term, which means that you should have a sufficient process of obtaining and processing the overall information of the entire project as much as possible. Many friends say that K-line analysis is metaphysical, and that those who analyze K-line analysis look down on those who analyze fundamentals, and those who analyze fundamentals look down on those who analyze K-line analysis. I think there is no conflict, and I will also simply judge the support and resistance levels by analyzing K-line analysis.
Take WIF for example, it has fallen from the 1.3-1.5 range countless times in the second half of the year, which means that there is sufficient capital to support the market and the support is strong. If it falls to this range, it is a very reasonable entry price, and the current return is almost doubled. In addition, its ecology and transactions are OK. Unless the project goes down to zero or collapses, the support at this position is still very strong.
So this is also a direction to look at the K-line. First of all, it is to see whether the current price of the project is at a historical low, or whether it has risen too much. After reading it, what do you think of the valuation of the project? At least in your heart, you may think that this project has a potential of 10 times, but now it has only doubled. Is it time to get on board?
But if you think the potential of this project may be three times, and it has now more than doubled, is it necessary for you to take such a big risk for the next little bit of remaining profit, at least within your expectations? Because once you get on the train, the drop of one times up and three times down is unbearable.
So the first three points, investment institutions, business data, and K-line directly determine whether I dare to step on this floor. I think every trader is like playing the game of hopscotch. You keep jumping forward. You may jump to the grid in front, and the grid floor collapses and you fall down. You may jump to another grid, but this floor is solid and supports you. So I have to make sure that the grid I jump down to is relatively safe and will not let me fall badly.
Looking upwards, we can see how much room this project has to bounce upwards. However, safety must be the priority, and then we must ensure how much room it has to bounce upwards. Looking at some of the information released by the official project, in addition to letting you know whether this project may have some favorable events in the future, it will also give you (expectations), which is equivalent to letting you hold on. When this favorable event is not realized or has been realized, you will find that something is wrong. This favorable event should be very large, but why is the price not changing much? You will take it patiently, and you will get it. At least you will run after your expectations are met, and you will not often encounter a situation where I am at the foot of the mountain, how come I don’t know that there will be such a big change next month?
In fact, many people are curious about why this industry is full of so-called insider information and front-running. But I think a lot of it is openly available. As long as you look for it carefully and evaluate it carefully, you can find this kind of information. So this is from the dimension of a single project. I may use these methods to judge the downward and upward space.
In fact, the profit-loss ratio is also a very good method, and it is also the method I prefer to use. For example, this profit-loss ratio is very cost-effective. After I buy it, if it falls by 20%, I will withdraw. If it rises, I will stop profit at 50%-80% or even double it. It is also a good screening method to estimate how much room there is to move upward based on fundamentals.
