Bear market: 5 main indicators before investing

Because the current period is in the bear market (bear) phase, it is harder to make a profit from your cryptocurrencies. To bid on projects promisingHere are 5 indicators to look out for before investing in a bear market.

1. What does the project bring to the ecosystem?

Many projects promise worlds and wonders, and sometimes even features that have no use cases. Therefore, first you need to meet the need for the project to be interesting for investors. So we have to ask ourselves about real scenario of project use. Does it bring something interesting, and it can take a long time?

If the answer is no, all you need to do is read the technical document of the new project in the hope of finding a rare pearl. On the other hand, if the project has specific uses, we will see another criterion to follow.

2. What makes the project stand out from the competition?

The crypto-ecosystem is a world full of projects of all kinds competition is fierce. Thus, the second indicator is the extent to which the project stands out among its competitors.

Does it bring real added value through features or a pale copy of what already exists?

In a sector that is constantly changing, if it is not allocated or is allocated very little, it may never be measured at fair value. If we take the case of decentralized exchanges (DEX), today there are many that have similar functionality. Therefore, it is especially difficult to launch this type of project without real added value.

3. How does the project generate income?

In cryptocurrency or in the real world, a person stays in the process or the work deserves to be paid. Therefore, the development of this type of project requires time and money.

Therefore, it is important that the protocol benefits from its operation. Thus, the purpose of this indicator is understand where and how the protocol will generate revenue build for the long term. As a rule, protocols do not have advantages over own tokens which will allow to involve new users. Instead, they will use redemption process buy and destroy (burn) them and ensure some stability of their assets.

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Therefore, you must ensure some economic stability of the project so that it is viable in the long run.

4. Roadmap (project roadmap)

The project roadmap will help identify its objects and ambitions. The NFT project, which intends to release only one collection, will have every chance to be forgotten in the next 2 years.

On the other hand, a project that has been going on for several years measurable and achievable goals is much more promising. Therefore, it is important to give priority to projects whose roadmap is constantly evolving.

This shows a certain motivation of the team to always strive to go further.

5. Does the project have money?

A project that has funds is found on the market in the same way as the average user. Therefore, it is important for him to know how to make a profit and not have any cryptocurrency in his wallet.

In addition, owning cash can allow it to survive in a bear market or call on third parties for a variety of reasons. It may also allow it to perform certain operations for greater expansion in the ecosystem.

It also gives you an idea of ​​whether or not the team’s funds are being properly managed. A DeFi project that is too heavily exposed to certain cryptocurrencies is not necessarily a guarantee of success, and we were able to see this recently with Terry’s fall.

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