If you’ve ever been interested in cryptocurrency markets (and since you’re reading this you're probably are), you probably already know that everything that happens there can be described with only one word: chaotic. We're not talking about the developments in the blockchain space, as those seem to be pretty orderly. No, we're talking about the market itself and its violent price fluctuations. Why do you always see countless experts forecasting the future price movements, most of the time outright failing with their predictions, and then making other forecasts like it was nothing?
The explanation is simple: nobody knows anything for sure in this market. It moves in all directions, and for a trader any information about what’s happening could help him or her get a better picture. That’s why all these gurus can be wrong all the time yet still be listened to, because they give information. Information is very valuable in conditions of uncertainty, and uncertainty is the ordinary state of the crypto market. Let’s find out why this is happening.
You got the power!
Every large financial market is supervised by various regulators in every country and protected by them from manipulation. For example, in the US, the Securities Exchange Act of 1934 prohibits any security price manipulation. Singapore has similar laws, Europe also has them, just like Australia has them; the list can go on for very long. At the same time, all these laws are applied only to the stocks and commodities markets, not crypto.
The crypto market is a speculative one. It has no fundamentals, unlike the stock market. All stocks are backed by real companies, some of them don’t generate profit, like Uber or Netflix, but the majority of them make money and pay dividends to their investors, which is the main reason to buy their stocks.
Source: xkcd.com
Crypto companies hardly make any money, if we don’t count some exchanges, and the majority of the futuristic projects don’t even have a finished product at all. It’s perfectly understandable, as it’s still a new technology, and the companies developing new products right now are the pioneers who learn by trial and error. But we have to face the harsh reality: everything about crypto right now is pure speculation; it’s about who has the potential to become the next Amazon or Apple of the crypto world, winning their share of the market not only among the other crypto projects but also among their non-blockchain competitors.
The price of crypto tokens can change by vast percentages per day on some minor news, such as Tron founder Justin Sun’s lunch with Warren Buffet and its cancellation. To understand all of the price movements, we have to be equipped with the best tools for market analysis and news delivery. The best option is to use something that could aggregate everything necessary to make trading decisions. Luckily, we can easily find such tools on the market.
If you want to use separate tools for each task, there are plenty of them. For staying up to date on the current news, you can use CoinLib news - a news aggregator, which compiles many sources into one feed. For watching charts, there is TradingView - the oldest and the most powerful tool for charting and checking prices. If you want to see large transactions between wallets, then you should definitely subscribe to Whale Alert account on Twitter. However, there’s an alternative if you’re looking for an all-in-one solution: the STIPS Oculus platform. You can find more on your own, but we’ll take their platform as the primary example for our review.
Everything you need in one place
The most important information that you require in making decisions is the news. STIPS Oculus serves as a news aggregator, gathering crypto news from all over the world and forming a live feed from them. You can choose which sources you want to include, and which ones you want to exclude.
Also, you can compare the time of news publications with the price actions of the assets, which could show the influence of news on your trades. Aside from these, here are the most important metrics you should follow:
- The flow of tokens between the wallets of whales - Sometimes crypto whales can move their stacks to exchanges to dump them, and getting out of all positions before them can save you from a loss. STIPS Oculus has its own blockchain nodes to collect fresh data about all transfers and sync it with their database for analysis in the Screener service. All activities can be monitored and compared with the charts at once.
- GitHub activity - It can track the uploading activity and build a development activity index based on software update periods.
- Community activity and marketing activity - STIPS Oculus measures the buzz around the project and the marketing efforts of project teams, checking numerous sources: Reddit, Bitcointalk forums, Telegram chats, Slack, Discord. The partnership with IBM Ventures allows STIPS to use IBM resources, such as the Watson supercomputer, for such tasks as large data gathering and analysis. After analysis, it defines the sentiment of users on various projects, and it can be used for making decisions on buying and selling tokens.
- The legal status of projects - Legal information is crucial in crypto. If you know that your favorite project has no open actions in courts, you’ll be more certain of your decisions. STIPS Oculus builds a database of legal entities for crypto projects, with the information about their offices, countries of registrations, licenses, bank accounts, legal problems - everything that can be found about them.
Overall, STIPS Oculus is an essential trading tool, even if it’s targeted mostly for a small audience of professional traders. Not all the metrics are affecting the price of an asset directly. As we stated above, this is only aggregated information that helps you get an overview of a project’s activity. Regardless of the tools you’re using, you should always follow your own feelings when trading. These are only the helpers, not the instruction for action.
Conclusion
Being in a Wild West environment, it’s important to hold your hand on the gun. As a trader, chaos is your enemy, not your ally, and by being informed more than the other traders will net you a serious advantage over them. If a whale moves his/her funds, it can catch many traders unprepared. But not you, if you knew it was coming all along.
Source: xkcd.com
When a project promising to build a worldwide blockchain network with instant settlements and revolutionary smart-contracts commits to its GitHub once a month changes their Readme file, you’ll know that something isn’t right. Some people may think that charts speak for themselves, but they understand their language only after they have spoken. Using complex market analysis tools, you will be able to deeply understand what’s happening and why it’s happening, without guessing like the “always-wrong” market gurus do.