Unlocking the Secrets of Crypto Trading - Descriptive and Sentimental Analysis

[Hamza2424]

Tips for Descriptive and Sentimental Analysis (V4)

Hi, dear Community so here in this part I will cover the things related to trading analysis with some recommendations that new ones should consider in their analysis and my tips as well regarding the Descriptive analysis and Sentimental analysis.

Next part Links

1. New to Trading - Tips and Suggestions (V1) Getting Started Full Guide
2. CEXs vs DEXs & Spot vs Future - Tips and Suggestions (V2)
3. Analysis & its Types - Importance of Analysis in Trading (V3)
4. Tips for Descriptive and Sentimental Analysis (V4)


Table of Content

► Descriptive Analysis
► Sentimental Analysis

Descriptive Analysis

A small overview of the Descriptive analysis has been already covered in my last topic you can check it out there. I would like to explain here how you are going to do a descriptive analysis for your investment and how you are going to check out the market sentiments this topic is going to be posted on the basis of my personal experience and learning.
So let's start with descriptive analysis. The first tip is to check out the tokenomics of the asset in which you want to invest.

Tokenomics: In tokenomics you need to check out the current supply and circulation supply of that asset then compare it with the maximum supply and total supply of it. Then check out how many shares of the total supply the team and venture capitalists are holding after getting an overview of it you will come to know how much value your investment can be for the project and how much is the potential of the token.

Market Value in Specific Timeline: After analyzing the tokenomics you need to check out the performance of the asset in history here I will recommend checking the All time high and All time low first then analyze the last historical movement in any specific timeframe this will help you to create and average buying price and checking about the potential of the profits you can make.

Recent & Upcoming Events: Here to check out the recent and upcoming events you can read their roadmap or white paper. In the recent and upcoming events you need to know if is there any asset supply unlock or collaboration ongoing in a project which will directly impact the market value of the asset in the current time and future.

Market Capital and Future Possibilities: Market capital is the total amount of money invested in the asset and this will greatly help you to determine the reliability of the asset. Project ecosystem future plans and upcoming developments on the project greatly determine the future of the asset you should need to educate yourself before investing in the ecosystem of the project and its upcoming plans.

That is all the basics you need to know with descriptive analysis, descriptive analysis is the most important analysis before the investment even more important than the technical analysis. With a good descriptive analysis you can achieve around 65% efficient investment in the crypto market in a large time frame on the same time with technical analysis you can take short-time trades easily even without descriptive analysis. I would recommend my new fellows focus on complete descriptive analysis for the Hold/long-term trading. There are various platforms where you can get basic information on any asset as CMC, and Coingecko both leading asset-tracking platforms.

Sentimental Analysis

I have already covered the sentimental analysis basic overview in the last and sentimental analysis is all about fear and greed in basic terms I have covered everything about fear and greed in my local post so I am quoting that one here I think all the necessary information and tips are covered in that post.

Fear & Greed Index Bull & Bear Market

Intro

The fear & Greed index, this index is the collection of social, psychological, and macroeconomic sentiments which show the market ratings according to recent all these sentiments. This value can help new users to make their entry and exit points analysis very easy. If anyone who is new to crypto and wants to invest in can use this technique and it can be considered the most efficient way to invest and make a good profit.

The fear & Greed index particularly has 3 main regions Green, Orange & Red according to the colors Greed areas show the market is greedy and orange area shows the market is neutral, and the Red one shows that the market is suffering or in fear.

For Example, check these images below...

Greedy



Neutral



Panic

How to decide the entry and exit points in the Fear and Greed Index

Actually, If the market is in the red region it is clear the market is panicking and you can take entry into the market for long-term investment plans I would recommend starting investing from 25 to a downward rating as much as it goes down the more valuable entry you can have. Distribute your portfolio never go all in and make split positions. Go with DCA in the Fear market.

On the Rating of above 70+, you should start booking your profit as it's the best way to make good profits because in crypto you never know ATH and ATL. so never book 100% of your profit there too go with split profit booking.

Today's Market Sentiments

[SamReomo]

You have done a great job my friend. Your have explained the descriptive analysis in the best way possible. But, I believe that if you can put an example that would help a lot. Like you described tokenomics, it should be better if you can put an example of a coin and share the details about the tokenomics so new traders can understand it very well.

You should also give an example for the market value in Specific Timeline so that the new traders can understand that how to do that step. Because there are many users who are new to trading and with just text they can't get the full concepts. A better way to clear out the concepts is to share some screenshots so the users can better view the picture of the scene and understand the steps in the best way possible.

I must say that you have written a well explanatory post about the descriptive and sentimental analysis. I really appreciate your efforts for creating such a good and helpful post about those concepts. I think that understanding sentimental analysis was much easier because you have included some good examples.

[tranthidung]

About Fear and Greed Index, you can use the chart from LookintoBitcoin. With a chart, you can get an overview and learn something from past Fear and Greed periods. With only an index score, you only know about a current situation.

Bitcoin Fear and Greed Index

It should be combined with Psychology of market cycles

[Zilon]

How to decide the entry and exit points in the Fear and Greed Index

Actually, If the market is in the red region it is clear the market is panicking and you can take entry into the market for long-term investment plans I would recommend starting investing from 25 to a downward rating as much as it goes down the more valuable entry you can have. Distribute your portfolio never go all in and make split positions. Go with DCA in the Fear market.

It could as well be a two way process where the price either moves downwards or upwards but the downwards takes dominance, 25% on a downward is a fair rating, But there will always be moments of testing which will escalate the fear and greed in traders in which even DCA will fail, those times where fake upward distribution will push traders into making wild decisions that could cost them heavy losses.

On the Rating of above 70+, you should start booking your profit as it's the best way to make good profits because in crypto you never know ATH and ATL. so never book 100% of your profit there too go with split profit booking.

on average 70% is a good point to book profit but also trader should study their portfolio's and chart closely to know when it is more safer to take profit. Investment generally is not all about making massive profit at all times. Some times can be extremely good , some times fair and other times teribble.