The highly volatile nature of crypto makes it extremely difficult to navigate. It is one of the key hurdles to the mass adoption of cryptocurrencies. Unlike the traditional stock market, the crypto market operates 24/7. Therefore, staying ahead of the trends is highly important to ensure your funds are safe.
As an investor, you must be able to track the movement of assets and make decisions based on the market sentiment. Since doing all this manually is humanly impossible, we have AI-enabled tools at your disposal. Whales and seasoned investors aggressively use such tools to predict movements accurately and make informed decisions.
Even if you have years of experience in the stock market, crypto is a different ball game altogether. The market sentiment may change overnight while you are asleep. By the time you wake up, the outcome of your trades might change drastically.
You Need To Look Beyond Charts
Fundamentals like buy volume and sell volume are among the many factors that impact the price movement of a particular cryptocurrency. Support&Resistance, Bollinger bands, and RSI are other factors. These are the factors that you can assess by simply looking at the chart.
But is that it? External factors like liquidity, market sentiment, news, and whale transactions heavily influence the market movement. Unless you are glued to social media or news websites all the time and have tens of different analysis tools to analyze these metrics, getting your trades most of the time is only a matter of luck.
Therefore, you need platforms that adopt a holistic approach and provide you with access to tech-enabled intelligent tools in a single platform. Here’s CoinDesk tracing the collapse of FTX, whose foundation was an expose article by the former.
Since the crypto market changes every few seconds, access to real-time information is paramount. Here come AI solutions that provide you with real-time information along with actionable insights.
How AI Helps You Maximize Your Crypto Returns
Predictive Analytics: Ascertaining which way the market will go from a particular point could be extremely tricky. AI-powered tools facilitate predictive analytics to analyze historical trends and data to predict future market movements. Such predictions aid informed investment decisions and maximized profitable opportunities.
Sentiment Analysis: Market sentiment directly impacts the movement in the market. Remember the FTX crisis, which added to the prolonged bear market? AI can analyze social media and news sources to determine market sentiment towards a particular cryptocurrency. You can understand the current market sentiment using these tools and make investment decisions accordingly.
Portfolio Optimization: AI can help investors to optimize their portfolios by analyzing the risk and return of different investment options. Diversification is a proven investment strategy that many businesses follow. But how do you know which tokens to add to your portfolio? AI-based tools can help you identify trending tokens. You can use the technology to measure the historical performance of a token and other fundamentals to ascertain if you want to add it to your portfolio.
Trading Algorithms: Can you stay glued to your screen all the time in search of profitable opportunities? The answer is obvious. AI-powered smart investment tools analyze market data and auto-execute trades to make the most of the market movement. This ensures that your portfolio benefits from positive market movements even when you are away from the screen.
Imagine getting buy and sell alerts based on predictive analysis by AI tools. Sounds too futuristic? Well, it is already happening.
Fraud Detection: AI can help you detect fraudulent activities in the cryptocurrency market, such as fake ICOs, scams, and phishing attacks. When it is difficult to generate returns, minimizing losses is equally good. Especially in a bear market, you must prevent yourself from getting rekt by chasing fake ICOs and scam projects.
Must-Have AI Tools For Whale-Like Returns
Token Analytics: Before you invest in a token, doing fundamental analysis and technical analysis is the usual practice. But it requires you to use multiple tools, news resources, and technical documentation to reach a decision. Token Analyzers are AI-powered tools that analyze various technical and fundamental aspects, including buy&sell volumes, liquidity, total holders, and market cap, to provide you with actionable insights. You can use these insights to make an informed decision. Such a tool also helps you evaluate the legitimacy of a project.
For token analysis, I use Messari. You can choose from thousands of cryptocurrencies and get access to critical metrics for TA and FA.
Whales Tracker: Let us be honest. Whales have the power to manipulate the price action through a single trade. Whales are accounts or wallets with large volumes of crypto assets. Imagine entering a trade that has already provided 30-40% returns, and you expect it to go higher. But what happens if a whale sells millions of tokens in one go? Your gains are reversed. Whale trackers are AI tools that provide you with real-time information about big buy or sell orders to predict the impact of a whale trade in advance.
For tracking Whales’ transactions, I use DexCheck’s Whales Tracker feature. It helps you view top buy and sell orders across different chains, i.e. BNB, Ethereum, and Polygon.
Address Analyzer: Tracking whale accounts is just one step. How do you benefit from their strategies? The answer is by tracking other trades involving their wallets. Address analyzers are tools that provide you with real-time information about the most recent trades of a whale account. You can use this information to choose the tokens you want to trade. For example, a token with massive sell volume ahead is likely to witness a downturn. You can use that as a hint to exit a trade.
Top Traders: Ever heard of copy trading? Copy trading is a strategy where newbies follow a particular seasoned investor and emulate their trades to maximize their return. But you need to be a part of a network to get access to seasoned investors. The ‘top traders’ tool helps you find the best traders for the day within seconds. Using the tool, you get access to the wallet addresses of the top traders. Just like an ‘address analyzer’ you can use this tool to monitor the traders taken by a top trader and simply follow them to maximize your returns.
Final Word
Volatility is an undeniable truth that every crypto investor must deal with. Every decision must be made while taking the nature of the market into account. With the market scenario changing within seconds, it is important to track movements in real-time and make decisions based on actionable insights.
This is where AI-powered smart investment tools come into play. They track the market moves in real-time and turn them into actionable insights to make life easier for you. If you can get all the aforementioned tools in a single platform, that’s icing on the cake. Such a platform can help you make better investment decisions faster than everyone else. The outcome is maximized returns. As the adoption of crypto assets picks up pace, the mainstreaming of AI-powered analytics tools is bound to happen. ChatGPT is just a trailer of what’s about to happen!