Bitcoin Forum

How do I know if some altcoin is overvalued. Can currencies be more valued than platforms than tokens? Are they valued after how much they are used in real life?

I think the best way to know if a coin is overvalue is to look at the trading volume if it directly correlate with the price movement, if know actual demand for this coin then that means the market feel the current price is high and does not worth buying at that time, this happened to BTC, the volume was drying up but the price kept moving high before the price crash

the best advice is to check its total market value in coinmarketcap then check the project if it has a product because some project doesnt have product but still with high value

D45

When you look at the chart and there you see that the price is at ATH than you can start to think that this coin is overvalued but still two weeks later you can see another ATH. That coin is overvalued not means that price will stop to rise. This is so-called speculation. The hall market is one big speculation.

Make a fundamental analysis, see what it's offering, if there are any real products - goods or services. Also, take a look at its potential. Now correlate this too, say, Ethereum..... and see if it is overvalued or not. And yes, of course, it's mandatory for you to check the total tokens/coins supply and correlate that as well.

Use tehnical analysis so that you will know if your coin is going to be overvalued ,so that you can immediately take your profits ahead than may others who are trading blindly.Basically when you have your technical indicators you would be able to identify your coin's movements using these indicators you would have some good idea when is the best time for your entry and exits.

The price corresponds with the coin's total capitalization. So to estimate the possible total cap just compare a capitalization of any competitors for the project which are already traded for a long time. Thus, you can see if the token is overvalued or still have a potential to grow.

Well, I personally find for overvalued coins and tokens without a real products. Like Cardano and Tron - a simple token valued for billions.

If you are looking for a good investments, search for projects with at least MVP.

well my friend, it's not related to that, a cryptocurrency is a thing that haves a value.. the coin has earned that value because of the exchangers giving it that value and because of the investors!
a coin or a token being overvalued when they reach a value that surpasses its valuation for a period of time, look at BTC for ex. last year it reached 20k and got back into 8K .. when it was 20k it was really overvalued in that period.

There are many altcoins which gets crazy pump during the bullrun of bitcoin i would like to give example of an altcoin named dogecoin as there was not much unique about this altcoin but still people invested into it in the flow but ended up losing much. Instead of following trend we need to check the uniqueness and specialization of the altcoin to know if it is overvalued or undervalued.

A project that lacks good competing power with similar projects in the same line, that is having too much hype in price is known to me as overvalued.
Another factor that i consider most is if a coin has just been listed and within a very short time, the price had gone above x5 or x10 above the ICO price and if the coin has billions of supply, with high trading volume, i will simply conclude that it is overvalued and which might still easily dump.

I think that the main factor of revaluation of a coin is when it grows in price very much because of some news and the coin itself did not do anything meaningful, besides that everything is beautifully written on paper

There is no undervalued project. As for it to gain in market value people have to decide that it is worth what it is worth. There are some projects that in my opinion shouldn't be in top 50 such as tron and verge for instance (there are others as well, don't get me wrong here). Mostly what you will see is when some coins get pumped hard and thus you can see by the chart that it can be overvalued by simply looking at charts. Or yet watch for projects that have an idea but not working product as they are useless until their project get lunched.

A good way to learn if a coin is overvalued is comparing it to similar projects and coins. You can ask yourself why this coin worths that much while the similar one worths less. There can be many different reasons for it . It can be pumped by a pump group or a fameous person. Never invest in a coin before doing your own research about it.

You can tell right away if its overvalued or not just look for its purpose, does it really justify the means of its price if you think its not, most of the time you are right.Just think does a mcdonalds burger should be priced 100 dollars if you think it does maybe you are right. see my point it really depends on the eye of the beerholder.

The topic of value is very interesting and crucial for crypto investors, at least I think so. I think to some degree yes, value is strongly connected to whether this coins is used or not, at the same time, it can be overvalued if there is a huge hype surrounding it.

can someone explain to me what do you mean when you say overvalued?
sorry if this is a dumb question im new.
thank you

Firstly, I suggest you visit beginners section to get any information related to the crypto as a newcomer, overvalued means that the price of a token is no worth with the platform. Product. Or any related thing to the result of development.
Said just like some platform which contains tons of shitcoin but they are worth some dollars at the moment. It can be called as overvalued because the platform has no usefulness.

I think the way to see if a coin has an overvalued price is to check the price chart in BTC for it. The ICO price should be a baseline price for it, you should look for the all time high (ATH) and the all time low (ATL).

You also need to make sure the volume for that coin is high (500k+) to avoid being caught up in a pump & dump and I would say if the coin price is more than the average between the ATH & ATL that coin is overvalued.

I believe when it comes to valuation it's a subjective matter. There are many way to evaluate it based on your opinion but this doesn't make it right, you have to look into the market cap, compare with competitors, see the potential of the project, predict and market and how this project going to perform. As many of it based on the future, it is hard to tell exactly what's overvalued or undervalued 100%

technically speaking value is based on supply and demand and since altcoins usually have ridiculously huge supplies but no use cases that can create any demand for them, they are all considered overvalued.

but in a manipulated market where prices go up and down based on pumps and dumps respectively the value has a slightly different meaning when it comes to short term. it is based on how much money is being injected in said altcoin and that comes from their hypes and the pumping team and possibly other teams behind it. and it can be noticed based on the volume drops and the media hype drops.

Most likely, you need a system analysis of each individual project. a simple analysis of the chart of the exchange will not help here. With a token, this is a little easier, in their case it is enough to analyze the project itself and its prospects. As a rule, the goals of developers are transparent even during the launch phase

You can see it by checking its market circulating supply. When the market circulating supply has a large volume the coin should have less value and if the market circulating supply has a less volume the price value of a token should be higher. You can check it to know if its overvalued or not.

If it has no working product and you can see that the team focuses on advertisment, then it is overvalued. Take for example EOS. It has only launched its testnet and its marketcap is in billions.

You might consider a coin is overvalued when You can see the process on how the coin price is increased. When the price is increased significantly in a short time, but the market volume is just steady, it might be just a price manipulation. The volume should increase just as much as the price or even more.

It can be seen on daily basis . An ordinary coin getting some huge value and still does not have a huge volume . That is when such things happen .
That is just for a short period of time and the sudden over value gets a big drop after a little time period . Also , if you look at the coin's features and compare its value you will be certain that the coin is over valued . On the other side , there are so many coins which should get amazing values due to their features.                                                                               

That would be the pumped coin with artificial money being invested into it!
Take example of the BCC who turned out to be overvalued after they put huge amount of money into it and valued it more than it could have been. So yes there could be coins like that in the market but they dont exist for longer than enough.
Mostly such coins are tend to get scammed and thus they see the exit for themselves very early.

It hard to evaluate most of the time. I usually evaluate by few factors: by comparing to similar other projects, by evaluating how big is the market for this particular project. If coin is not reacting well on the news and events this gives me a hint that it is probably overvalued. Some coins are overvalued since ICO, so for this coins its hard to get more value

one of the reasons why cryptocurrencies are overpriced is when you try to check their trading volume because there are too many factors that makes a crypto coin to pump.
there are Pump and Dump groups that will cause other investors react of FOMO and then suddenly there would be a massive dump after few hours of pumping.
there are too many hypes that some celebrities are promoting various coins that will convince other investors to shift on that coin and suddenly after few days there will be again a massive dump.
for me, the only thing to check if the coin is over priced is checking on their trding volume.

this statement is somehow true.
In my own understanding, people started to doubt for an altcoin to be an overpriced is when they don't believe a crypto project and it's supply and demand.
although trading volume could be a suspect but the moment the dev team are pushing their best to promote their crypto project to public then that will ignite the pump as people were trying to set on board before the coin price value will surge.

I agree to you with what you said, to know if the coin is overvalue is only by checking the volume in the market which means during the ICO stage to know is not possible because everything is just all about the concept, white paper and the road map. Although the project may seems like a promising project this doesn't enough to conclude.

See the max supply of coin and previous trading volume . If any pump happened then check the news related to coin follow their twitter , telegram find any latest news .If you find genuine reason then you can keep holding  Most of the time coins get pumps based on fake news or based on trading bot if you find take immidiately profit .

I would say the best way to find out if a coin is worth too high is to look at the volume of trade if it is directly correlated with price movements, if you know the actual demand for this coin then it means the market feels the current price is high and not worth buying at that time. and is to check its total market value in Coinmarketcap then check the project if it has a product because some projects do not have a product but still with high value.

Trading volume does help in determining whether a particular coin is overvalued or not as you stated which is why i agree with what you stated. I have observed some lesser known coins and tokens with heavy trading volumes, but low values which puzzled me sometimes and understood later on that most of such coins and tokens were only being manipulated by pump and dump groups. Honestly, I almost fell for such P&D groups sometime back, but research helped me avoid such a mistake. Along with these factors, insane rallies by Bitcoin also tend to overvalue many coins and tokens like what happened last December.

This question is somewhat difficult, but I will attempt to give the best answer I can. First a coin need to have real life use to determine its price through demand and supply, if the coin does not have a real life use  or a product that worth such demand placed on it, that means such coin is been hyped and will soon fall to its real price.