- Crypto analyst Sheldon Evans shared tips on finding 10x performing cryptos.
- Evans highlighted sentiment as a key tool for identifying cryptos likely to surge.
- Also, Evans believes sentiment is a good alternative to technical indicators.
Popular crypto YouTuber, Sheldon Evans, shared how best to identify 10x performing cryptos in a recent post.
Of note, a 10x crypto is one that is likely to grow exponentially giving investors at least a 10x return on investment. For instance, before the 2017 market crash, Bitcoin gained up to 955%. While Bitcoin may in many ways be the expectation, several other cryptos have similarly thrilled investors. Yet, the question remains, how do you identify 10x performing altcoins before they surge?
How to find 10x performing coins
According to Evans, finding 10x performing cryptos requires managing your picks and plays as accurately as possible. This entails finding quality projects and identifying where the capital is flowing to.
Evans identified sentiment as the top consideration for achieving top gains. In fact, the crypto analyst considers market sentiment a key consideration for when to buy and sell. Market sentiment, another term for hype, plays a pivotal role in making decisions that lead to astronomical gains. Profits lie in knowing when to cash out, not only in knowing the next coin that could replace Bitcoin.
The great thing about sentiment is that one doesn’t even have to look at the charts, as they confuse many people. When hype for a coin reaches the euphoria stage, it’s hard to sustain that hype. The hype will then shift to other coins with a loyal following and growing hype. An added advantage is a coin that also has productive assets on top of the pure sentiment.
For instance, when Cardano reached its peak, sentiment shifted in favor of other smaller projects. One such project is Luna, which has strong fundamentals behind it and a lot of capital being allocated in productive ways. Thus, the smart move is to sell the coin which has peaked and invest instead in the coin with growing sentiment.
On the other hand, Dogecoin is an example of a crypto with massive hype that is not backed by project fundamentals or use cases. Evans, however, noted that if Tesla CEO and DOGE fan, Elon Musk, manages to flip DOGE into a viable payment option for Tesla merchandise, the meme token will skyrocket. For now, DOGE value remains speculative at best.
Notably, making decisions based on market sentiment has led to buying coins that went 100x for some investors. Making a good call is the result of judging human sentiment correctly. To do this you have to have a good understanding of human behavior, emotions and actions. Correctly doing this would assist in getting the largest gains.
How to measure sentiment
Google trends is a vital tool you can use to determine sentiment. Google trends show changes in how people are becoming more familiar with a topic. This may show growing popularity and hype since marketing dictates that customers must have 7 interactions with a product before buying into the hype and making a purchase.
One can also go on social media and see what sentiments and terms are trending. Evans cites Twitter as a good platform to gauge sentiment. What people are talking and tweeting about often precedes a price pump.
If the project has no hype behind it and it does not have many investors talking about it, then it is not yet a good investment. One has to search for products that people are already talking about. For example, there is a social media buzz around Metaverse after Facebook changed its parent company name to Metaverse. In addition, global brands are starting to venture into the Metaverse, like the Adidas and Coinbase partnership.
Also, to find the next big coin, one can go to aggregate crypto websites such as CoinGecko or CoinMarketCap. Exploring these sites and getting familiar with how they work can reveal hidden gems outperforming the market. Of note, when a coin jumps in value, you have to calmly assess whether the opportunity has already passed or not. Investing late will result in a loss of value as the sentiment will have moved on.
Other tools like DappRadar will help you determine the number of users for things like games. Similarly, Play to Earn will show you the level of engagement a gaming project is receiving.
Psychology of a market cycle
The next thing is timing. It is important to note that financial markets, including crypto, follow a cycle as depicted in the chart below.
Source: Dr James Martin, What I wished I’d known before investing in crypto (2020)
The large red arrow to the far left shows the euphoria stage. This is the stage at which Bitcoin hit $20 000 per coin and most people bought into the hype. Sadly, it was also one of the final stages of the bull market for Bitcoin in 2017. After that, the market began to reverse and never quite recovered until the next bull run. The euphoria stage is good for cashing out and bad for buying coins.
The crypto market has been volatile over the past few weeks with Bitcoin dropping as low as $42,000. At the time of writing, Bitcoin is trading at $48,606.09, this is 29.6% below its all-time high price of $69,044.77. For most investors, this price remains out of reach and it can be tempting to believe that the window of opportunity to invest in crypto has passed. However, the rise of other layer 1 projects (Cardano, Polkadot, Luna) and the Metaverse is evidence that the crypto market has not peaked yet. As such, there is still room for the crypto supercycle to happen and to achieve 10x gains by investing in the right coins.
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