How to identify if a crypto will rise: complete guide to signals to watch out for

With the extreme volatility of cryptocurrency markets, many investors wonder how to know if a crypto will rise or fall. The legitimate question: how to anticipate price movements without falling into the trap of impulsive buying and selling? The answer lies in a systematic approach combining the study of the project’s fundamentals and technical chart analysis.

Scrutinize the project’s fundamentals to anticipate trends

The first step to identify if a crypto will rise is to examine the solid foundations of the project. A strong project shows encouraging signs that may indicate medium- and long-term price appreciation.

Start by analyzing the project’s white paper. This document outlines the vision, technological objectives, and roadmap. A detailed and coherent white paper suggests that the developers have a clear and sustainable strategy. Conversely, a vague or incomplete document often reveals a lack of serious planning.

Next, examine the project’s economic mechanisms, known as tokenomics. Check the total supply of tokens, their distribution, and burning mechanisms. Projects with a limited supply or incorporating a deflationary system demonstrate thoughtful management of scarcity, creating conditions for potential growth. For example, Bitcoin stands out with its capped supply of 21 million units, a factor contributing to its status as a store of value.

Community activity is a revealing indicator. A dynamic and engaged community signals growing interest in the project. Projects with an active and increasing supporter base generally perform better. Conversely, a dormant or declining community may indicate difficulties.

The involvement of institutional investors and venture capital funds also adds credibility. Support from major players or partnerships with recognized companies are positive signals showing that professionals are betting on the project’s success. These alliances boost investor confidence.

Finally, evaluate the project’s technological differentiation. Innovative solutions or significant technological improvements attract attention and investment. Imitative projects without unique propositions struggle to justify sustained appreciation.

On the other hand, some signals warn of a possible price drop. A weak or absent white paper indicates a lack of planning. Chaotic tokenomics with uncontrolled supply lead to inflation and depreciation. The gradual withdrawal of major investors is a serious warning sign.

Read technical signals to predict price movements

Technical analysis offers a complementary and powerful perspective. By observing price charts via candlesticks, you identify patterns that repeat and suggest future market directions.

Some formations indicate a higher probability of upward movement. The hammer is a classic reversal indicator to the upside: after a decline, a candle shows a long lower wick and a small body, indicating buyers are regaining control. Bullish engulfing occurs when a large green candle completely engulfs the previous red candle, signaling a trend reversal in favor of buyers.

Conversely, other patterns warn of an imminent correction. The shooting star appears after a prolonged rise and shows a long upper wick with a small body: it signals that sellers are regaining advantage. Bearish engulfing happens when a large red candle engulfs a previous green candle, marking a bearish reversal. The head and shoulders formation, with its central peak surrounded by two lower side peaks, is a classic signal indicating a bearish reversal after a prolonged bullish trend.

Combine both approaches to improve your predictions

The synergy between fundamental analysis and technical analysis greatly increases the reliability of your predictions. A crypto with solid fundamentals reinforces the technical signal, while a strong technical signal in the context of weak fundamentals warrants increased caution.

This dual approach transforms your way of understanding if a crypto will rise: instead of relying on a single dimension, you explore the project from multiple angles. The best opportunities emerge when technical and fundamental signals point in the same direction. Stay alert to divergences: a positive technical signal combined with weak fundamental signals may indicate a trap for buyers.

Remember that predicting crypto movements remains a complex exercise where risk persists. Diversify your sources of information, continuously update your analyses, and always set stop-loss limits to protect your capital.