Bitcoin’s Fundamentals: A Simple Guide To Crypto Data — AAX Academy
It’s not enough to simply invest in an asset and wait for it to go to “the moon.” To justify your decision, limit your risks, and increase your chance to make a decent profit, it’s crucial to learn more about the market around the asset you plan to put your money into.
Fortunately, in the case of Bitcoin and cryptocurrencies, we have plenty of data and excellent resources in part due to the transparent nature of the underlying blockchain technology. By analyzing several data points as well as reading the latest news and developments around crypto, you can screen the market to find investment opportunities, identify crucial trends, as well as learn what threats could affect your digital asset holdings and how to act accordingly.
In this article, we have collected the most important resources you can use to learn more about the crypto market.
Let’s see them!
Crypto Rankings and Basic Data
One of the first steps to analyze cryptocurrencies is to check sites that aggregate key data such as price, market cap, trade volume of the coins, and trade venues.
By doing so, you can determine some of the risks associated with a coin (e.g., a very small market cap usually means a more risky investment), analyze historical price trends, and decide on your allocation.
Examples:
CoinMarketCap: CoinMarketCap is the most popular platform for exploring basic data about cryptocurrencies that provides an excellent overview of each coin and how they rank compared to others.
CoinGecko: CoinGecko is very similar to CoinMarketCap, and it’s also a great resource for checking general data on digital assets.
Messari.io: While the above two solutions provide only the essential information on cryptocurrencies, Messari.io takes things a little further by offering users an advanced crypto screener similar in functionality to the ones usede for picking stocks. While there’s a paid version of the solution, you can create and use one screener for free on the platform.
ContractMarketCap: Unlike the prior platforms, ContractMarketCap lists and ranks crypto derivatives instead of “standard” digital assets. On the site, you can explore the derivatives products each exchange offers for different cryptocurrencies, as well as some basic data on them, such as the index price, open interest, and volume.
CryptoCompare: As its name suggests, CryptoCompare lists, ranks, and compares a wide range of digital asset solutions — such as wallets, cards, and exchanges — in addition to the actual coins available on the market.
On-Chain and Network Data
Due to the traceability and transparency of blockchain networks, you can get valuable insights from on-chain data providers.
For example, you can look at the number of active addresses or daily transactions to assess a cryptocurrency’s network’s health.
Furthermore, crypto exchange inflows and outflows can generate buy or sell signals for a coin. At the same time, the hashrate and mining activity of a blockchain is a good indicator for determining the security of networks based on the Proof-of-Work consensus mechanism.
Examples:
Glassnode: A leading on-chain data provider and intelligence platform where you can explore basic charts and indicators for free (advanced ones are paid). As an extra, Glassnode publishes its own analysis of Bitcoin each week on the company’s Insights page.
CryptoQuant: Similar to Glassnode, CryptoQuant publishes network metrics and charts for Bitcoin, Ethereum, stablecoins, and altcoins. Except for pro charts, all data is available (with some lag) for free to users who create an account.
CoinMetrics: If you are up for the challenge and don’t want to pay a subscription fee to access numerous charts and indicators, CoinMetrics is an excellent resource to gather valuable insights from on-chain information. In addition to Bitcoin and Ethereum, you can find data on most major cryptocurrencies on the site. Interestingly, CoinMetrics allows you to create and fully customize your own network and correlation charts.
Institutional Investor Activity
Institutional interest in crypto has significantly increased in the past few months.
For that reason, it’s essential to know how much digital assets corporates are buying and holding, along with some important data, such as premiums on institutional-grade cryptocurrency products.
Examples:
Grayscale Zone by AAX: Over the years, Grayscale has become the largest crypto asset manager on the market, with some crypto traders considering the company’s trust fund portfolio as an indicator of market confidence. Grayscale handles digital asset investments from institutional and accredited investors in the US, and therefore, keeping track of the fund can be very helpful in assessing market sentiment.
Bitcoin Treasuries: Bitcoin Treasuries collects all the BTC investments made by both private and public businesses as well as ETF-like digital asset funds. It’s an excellent resource for those who want to check out how much institutional investors have already allocated to Bitcoin.
Trading-Related Data and Signals
If you are actively trading cryptocurrencies (on a daily, weekly, or even on a monthly basis), it’s crucial to check out websites where you can find advanced charts and signals as well as short- to mid-term price analyses by experts.
For example, monitoring changes in the open interest of digital asset-based futures and options allows traders to assess current crypto market sentiment and the strength of price trends.
Examples:
Datamish: Datamish provides margin trading data on various cryptocurrencies (such as Bitcoin, Ethereum, and Litecoin), focusing mostly on comparing short and long positions on the derivatives market. By analyzing the site’s information, you can get valuable insights about whether traders are predominantly bullish or bearish about certain digital assets.
The Block: While The Block is a crypto news site, it has a page dedicated to data on the open interest in Bitcoin and Ethereum futures and options derivatives.
Alternative.me Crypto Fear & Greed Index: Fear and greed are among the top emotions impacting traders and investors. During extreme fear, investors may panic-sell their holdings, while pouring excessive funds into coins when they get greedy. Alternative.me’s crypto fear and greed index is a good resource for getting some insights into the current market trend.
TradingView: TradingView has been known as the ultimate hub for traders, where you can check the price charts for most markets (including crypto), set up screeners for assets, as well as take a look at the ideas and analysis of experts. When you are on TradingView, we recommend checking out one of our personal tradingview accounts for quick insights into price.
Crypto Mining Stats
Crypto mining data — such as total network hashrate, difficulty, transaction fees, and pool distribution — helps miners select the most profitable coins. It also provides important information about the security and usability of a blockchain.
For example, knowing when the next Bitcoin halving takes place allows users to determine the start of a next (potential) bull market.
On the other hand, you can find out how secure a blockchain is by analyzing its network’s hashrate (high hash powers usually mean a safer network that is less likely to be taken over by attackers).
Examples:
Whattomine: Whattomine is a great resource for miners. By selecting their equipment and providing their electricity costs, the site allows users to calculate their potential earnings for different coins.
CoinWarz: In addition to mining data, CoinWarz features calculators for multiple cryptocurrencies to predict (potential) mining revenue.
BTC.com: Besides offering a chance to join its pool, BTC.com is a good resource to check various Bitcoin mining stats.
Cryptocurrency News
We can’t stress enough how important it is to stay up-to-date with the industry’s latest news.
This way, you can learn the key trends surrounding the sector as well as the latest developments of major market players and regulators.
With that said, it’s important to choose good resources for reading news about crypto since many magazines (mostly mainstream media outlets) tend to publish incorrect, sensationalist, or overly subjective articles on the market.
Examples:
Cointelegraph: Cointelegraph is among the most prominent cryptocurrency news outlets. The site publishes high-quality articles every day on major events as well as opinion pieces from external experts.
Coindesk: Like Cointelegraph, Coindesk is among the top crypto news websites that regularly publish excellent pieces on digital assets.
Decrypt: Decrypt is a crypto news site focused on publishing articles on the decentralized internet and Web3. Interestingly, the project features its own token, and you can earn digital assets for actively engaging with the magazine (e.g., for reading or sharing articles).
Twitter Analysts
It’s no for nothing that Twitter is often referred to as Crypto Twitter. You can find multiple analysts who regularly share their views and projections. Of course, you will have to assess for yourself if you think their analyses are viable.
Examples:
Willy Woo (@woonomic): Willy Woo is a popular on-chain analyst that regularly shares his insights. Willy also has a website where you can find great charts for Bitcoin (e.g., BTC volatility and inflation rate).
PlanB (@100trillionUSD): PlanB is a cryptocurrency analyst that has been known for creating the Bitcoin Stock-To-Flow model. In addition to Twitter, PlanB’s website is a good resource for reading the analyst’s views about the crypto market.
Cryptocurrency Forums and Communities
In addition to experts, data providers, and news websites, it’s also important to hear what individual users say about cryptocurrencies.
By participating in digital asset-related forums and communities, you can join the discussion, get your questions answered, learn some pro-tips from veteran crypto users, and just be up to date with how events are received in the community.
Examples:
Reddit: On Reddit, you can find many cryptocurrency-related communities, with each major project usually having its own subreddit on the platform. The /r/Cryptocurrency subreddit is a good starting point.
Telegram: The instant messaging app Telegram is popular in the crypto space. While there are general groups as well, most digital asset projects feature their own Telegram communities to engage with their users. As a side note, AAX also has a Telegram group which you can join to participate in the discussion and learn the latest news about the institutional-grade, LSEG-powered crypto exchange.
Bitcointalk: Founded by Bitcoin’s anonymous creator Satoshi Nakamoto, Bitcointalk is one of the oldest cryptocurrency-themed forums. By joining the platform, you can participate in various discussions about BTC, altcoins, blockchain technology, the economy, and many other topics.
Learn More About Crypto on AAX Academy
AAX Academy is a knowledge hub featuring tutorials, educational guides, and explainers for everyone interested in learning about crypto.
From the basics of cryptocurrencies and bite-sized pieces introducing different digital asset projects to fully fledged trading strategies and industry explainers, AAX Academy covers a wide range of exciting topics to get you started and extend your knowledge on everything crypto.
Originally published at https://academy.aaxpro.com on March 26, 2021.
