CoiningKit — Use CoiningKit to be one step ahead of the rest of the market.
While so many new crypto traders enter the market trying to make quick money, it is evident they are actually losing money fast because they don’t have the resources to understand the complexities of crypto trading very well.
As a result, novice traders face several different types of challenges:
- They start following pump and dump groups and end up losing money by buying when others are dumping.
- They end up buying a lot of a coin because the price seems low, without understanding the total coin supply and market capital concepts, and then the coin price drops.
- They learn to follow trending coins, but as soon as they buy the price always drops.
- It’s hard for them to find all necessary information in one place to do coin research.
Despite being just one step away, new traders always end up on the losing side. CoiningAI, however, built tools that can help new traders, as well as experienced traders, understand crucial data:
- If a coin is overpriced, undervalued, or legitimate.
- When a coin is trending on social media, which usually follows the change in price.
- Appropriate ranking of the coins by combining both the market cap and trading volume.
- Coin detail page for one-stop coin research and coin updates.
Understanding these tools can help traders wisely invest in the right coins. For this purpose, we have built a series of tools ranging from basic coin market cap and trading volume to advanced AI used to extract proper coin information and calculate coin social buzz. Our proprietary algorithms for understanding coin values and coin buzz not only help investors, but also help us build other products better.
Normalized Coin Price to identify overpriced and undervalued coins
One key in the cryptocurrency market is to know when a coin is overpriced or undervalued. The overpriced coins are ones you should refrain from purchasing, while undervalued coins could represent a good investment with room for growth. With CoiningKit, you can use the Normalized Coin Price feature to help identify those coins.
We calculate normalized price by using the same amount of coin supply as Bitcoin. This gives a good understanding of the price you are actually paying for the coin and if it is overpriced. If the normalized price is unexpectedly high for a coin, it is likely to fall sometime soon. Calculation inspired by this article, written by Eric Wall.
Another tool that can be useful in determining overpriced and undervalued coins is Rank difference. Rank difference is the difference in ranks between normalized price rank (“Normalized Rank” in normalized price page) and overall rank (“Rank” column in our coin ranking page).
Rank difference can be used to find which coins are significantly overpriced (extreme negative values), but not evident. Please note: This is just one way to find overpriced and undervalued coins. The rank difference by itself should not be used to identify if a coin is good or bad buy and other research is required. For good buys, consider top coins from our coin ranking page or check our short-term good buy suggestions. Only invest after doing fundamental research on these coins.
Additionally, when choosing coins to invest in, volume percentage is an important factor. Volume percentage is the percentage of volume in respect to Bitcoin’s trading volume. Volume percentage can give an idea of which coins have good volume/liquidity. You should consider higher volume coins for long term or general trading. Low volume coins could be good for quick gains in short term, but might not be good for long term or you could break even on short term.
You should stay away from low volume, overpriced coins, where rank difference is significantly negative or normalized value compared to your known coins doesn’t make sense.
For example, in this screenshot, the price of the coin E-Dinar Coin is $1.1M per coin, if it had the same supply as Bitcoin (21 million), whereas Bitcoin is at $11K. Similarly, SolarCoin is valued at $2785, while Litecoin is valued at $869. You can compare the normalized price to understand if some coins are overpriced, such as E-Dinar Coin, SolarCoin, or if some coins are undervalued, such as Litecoin. People are generally fooled because of low price per coin and fail to think about the coin supply.
A significant negative rank difference is an easy red flag to spot. If the rank difference is significantly high, you should do fundamental research to understand why that is the case. For example, out of the rank differences in the screenshot, bitUSD is an exception. It is a market pegged asset (MPA) issued on the Bitshares platform. These assets are known as bitassets or smartcoins. Smartcoins always have 100% or more of its value backed by BitShares (BTS), and can be redeemed for it at any time. You want to fundamental research from our coin detail page to understand if there is a good reason for high normalized price. Otherwise, you want to be very, very careful and stay away from these coins with high negative rank difference.
Finally, we add trading value as the percentage against the Bitcoin trading volume. Trading value offers an easy to interpret number that allows you to understand which coins have good trading volume. Again using E-Dinar Coin as an example, it has 0.000…% volume compared to Bitcoin. This means the volume is so low it did not show even in 3 decimal points, but the price is significantly high. This itself is another red flag. If the overpriced coin you are buying doesn’t have a high volume, you are essentially stuck with that coin and it will be hard to sell it at a decent price. Try to avoid low volume, high negative rank difference coins.
Coin Ranking based on Market Cap, trading Volume and Normalized price
The next tool shows the coin ranking based on the combination of market cap, trading volume and normalized price. Combining all of these metrics gives a much better sense of the actual coin rankings. Here are the top coins based on all three metrics.
Prospective short/medium term good coins to buy based on high trading volume and lower price
CoiningKit can also help you find coins that are good to buy in the short and medium term because of high trading volumes and lower prices. Prospective good coins to buy are ones with very good trading volume, low normalized price and are currently outside of top 10 in our coin ranking.
On CoiningKit’s good buy list, we rank the coins by combing normalized price (the lower the better) and trading volume (the higher the better). We also filter out coins below a threshold of trading volume. These coins are a good short-list to consider for short-term to medium-term gains because they have very good potential to increase in price.
There are things to remember when using the good buy list, however. For instance, a trading volume increase could be due to a pump and dump. Thus, it’s important that you follow the good buy list for several days and see which coins are consistently ranked highly. Additionally, you MUST do your own fundamental research to find out if it’s a good coin to invest in.
You should also do technical analysis to find out if its a good time to buy the coin. For example, you can use RSI, Bollinger Band, MACD or other indicators for this research and analysis. You don’t want to buy a coin when it is at its highest price and the price is going down. Learning about the technical analysis can help you make a better decision on when to buy or sell.
To identify if it’s a good time to buy or sell a coin, you can also use our AI driven trading signals system, CoiningSignals, which considers price history, trading indicators, and social media buzz to track a coin’s potential.
Prospective alt-coins with low price and a potential to increase in price
The idea of the final tool somewhat goes against the other tools we’ve discussed so far. In our other tools, we are trying to show people which coins are overvalued because people are not accounting for the maximum supply. The idea of this tool is that many people are not going to notice or understand maximum supply, so all they will see is the price of the coin. This is a symptom of market psychology (nicely explained in this article, written by Panos Mourdoukoutas). This tool can help find good alt-coins that have seen significant gains because of the price benefit, but we try to filter the garbage coins by considering the trading volume. Because of that, a coin such as the E-Dinar Coin will not show up here even though the price is less than $1.
With this CoiningKit tool, we suggest to use maximum caution because the price of these is misleading due to significant maximum supply. However, if a coin has a good team, and a good product, they can definitely increase in price. Let’s take a look at Cardano . It doesn’t have a product or use like Litecoin, but the price and market cap are both significantly higher already. This gives little room for an increase with Cardano, and in fact, it could even decrease. So, you must consider the market cap and normalized price in the calculation to find out if the coin has the potential to increase in terms of market cap and normalized price as well. However, Cardano has a very solid team, so if the total crypto market cap keeps increasing, and Cardano maintains its rank, the price will also increase. In general, if you want to make significant gains in short term, you want to look coins outside of top 10 or 20. Those can increase in price more, but those are also riskier too.
In a bear market, you would actually see these coins with significant coin supply and low face value decreases in value the most. See in the screenshot from https://athcoinindex.com, which shows the current coin price’s difference from the ATH (all time high price). We have highlighted all coins less than $1 face value. The coins less than $1 are the most common coins to drop the maximum value in a bear market.
This is obviously just one factor, however, and other factors play a role when a coin drops by a significant margin. However, this also means these coins will give you the most potential for significant gain. If you buy these coin in a bear market and then sell at the all time high, you make significant gains. This is why you need to understand technical indicators or use tools like CoiningSignals to make significant gains from these coins. At the same time you need to do fundamental research to make sure the coin has the potential to go back to its ATH value.
Screenshot taken from https://athcoinindex.com on March 13, 2018.
These tools from CoiningKit will help you get a sense of good coins, overpriced coins, and undervalued coins. But you still need to do some research on the coins to understand if they are solving new problems, instead of just having another coin for doing the same redundant things.
Social Rank combining News / YouTube / Twitter buzz, active Reddit users and Exchange adoption
Prices for cryptocurrencies depend a lot on what people are saying on social media. If people keep hearing about a particular coin from all of their social channels, they are more likely to buy and others will feel the fear of missing out (FOMO). There is an obvious correlation between increase in social buzz and price change. If a coin suddenly gets more social buzz, that is also reflected in short-term price change (either positive or negative) as well. Whether or not that price change is good or bad depends on the type (positive or negative) of buzz.
However, tracking that social buzz is easier said than done. Let’s first talk about simple way of identifying social buzz.
Let’s start with Twitter. You have to find all the tweets that contain a particular cryptocurrency. Let’s take Verge (XVG) as an example. Here is a tweet that contains the word verge, but is definitely not about the cryptocurrency Verge!
Let’s say you apply another level of filtering by considering only the tweets in the “cryptocurrency” context. This is already a non-trivial problem, and unfortunately, still does not solve the issue. Here are a few examples:
This problem is not only with Verge, as it also applies if you want to search with the coin symbols, such as ETC, or Ethereum Classic. The word “etc” will match against many keywords, even for the tweets related to cryptocurrencies, but they might not refer to Ethereum Classic.
There are many more examples. For instance, if you are not careful, Neo-Nazi will match against one of my favorite coins NEO, subreddits will match SUB, and Economic status-quo will match SNT, just to name a few examples.
You face the same problem with News and YouTube search results. First you have to build the system that can monitor all of the buzz 24/7, but your system needs to be “intelligent” and be able to filter out the inappropriate results. This is where the AI of the CoiningAI comes in!
CoiningAI’s AI (Artificial Intelligence) helps you to be “intelligently” social!
At CoiningAI, we have built systems to monitor social media 24/7 and apply AI on the results to filter and count the information appropriately. We currently have a beta version and you will see more improvements over the coming days.
Our article on how you can do your own research: http://bit.ly/CoiningDYOR describes the coin detail page, where you can see the AI’s filtering in action. You’ll find news results, YouTube results and an About page where we aggregate the appropriate details for that coin, along with a Wiki description if available and, in some cases, CoiningAI’s own summaries. Again, it is still work in progress and if you find some obvious errors, please let us know.
CoiningAI Social Rank
After we monitor and extract the appropriate information from social channels, we need to rank the coins by combining and analyzing all of the information. First, let’s go over the platforms we are considering for Social Rank and how we are collecting and calculating the ranks for it.
To understand the social buzz, we are monitoring Twitter and YouTube. To understand the mainstream media buzz, we are monitoring reputable news outlets. For community support, we check the active users on the coin subreddits, which is also a kind of social buzz metric. For adoption information, we monitor the exchange adoption.
Screenshot taken February 16, 2018.
We are collecting the news results from a third party partner for now. However, we are building a news search tool product for our sister company — Blackbird.AI. The Blackbird.AI news search tool has the AI functionalities for search built-in, so the results will be more accurate as time progresses. If the AI-based news search tool in general interests you for any internet research, such as research for stock trading, journalism, or something else, please feel free to contact us.
For Twitter, we are already using Blackbird.AI’s Twitter streaming and AI functionality. Note that for the tweets we show in the coin detail page, we are only aggregating the tweets from the official Twitter accounts for a coin. In this case, however, the tweets come from any users for a more appropriate reflection of overall Twitter buzz. For Twitter results, we are considering the results of last 1 hour and last 1 day, but more weight relies on the results from the last hour to ensure the score gives more preference to recent spikes.
For YouTube, we monitor YouTube results 24/7 for the last 1 hour, 1 day, 1 week, and 1 month. You can see the results in our coin detail pages, e.g. ETH (check the YouTube tab). To calculate the YouTube rank, we consider the combination of “total results” and the “view count” of top results for last 1 hour and 1 day, with more weight on last 1 hour results, similar to Twitter results.
For Reddit, we rank by the current active users in coin subreddits. This gives a good indication of community support and social buzz about that coin. For example, if a coin suddenly gets lots of attention, more people go to the Reddit page to understand what’s going on and to learn more about that coin.
Exchange adoption is calculated by how many exchanges have the coin and how many pairs (e.g. NEO/BTC, NEO/ETC, etc) there are, with the higher that number is being better. When a coin becomes more popular, more people want to trade it and more pairs for trading become available. So this is a good indication of a coin gaining popularity and getting traded more, which results in higher trading volume and more adoption.
Finally, we aggregate the Github commit counts. This is not necessarily a good indicator of the price, but it is a good indicator to understand if there is a solid team of developers behind a coin. For some coins, partnership is also more important, and a coin could just commit many times a day with minor changes. So this is not something we want to consider for ranking coins, but we will show it in our coin detail page. This way, if a coin seems suspicious, people can easily check the Github activities and consider it as a factor when judging if it’s really a scam or not.
This is a work in progress, but our coin detail page will have this information (along with Github activities). It could eventually look something like this:
One thing to understand is that mainstream media is still all about Bitcoin. Check all of the cryptocurrency news, and you’ll see that almost all of it is related to Bitcoin. For top coins, you see some other news as well, but in terms of the number of news articles, there’s no comparison. On Twitter/YouTube, there are more mentions of other coins than with news outlets, but it’s still nowhere near the amount of Bitcoin.
Here is a screenshot of Twitter buzz from the last 1 hour when this was posted. We show the relative volume, which means we take the maximum count and divide all of the counts by maximum count. This means that if you have seen 100 tweets related to Bitcoin, there were ~53 tweets about Ethereum, ~14 tweets about Litecoin / Ripple, ~3 tweets about Tron, and so on.
If you check our http://coiningfeed.com and go to the Twitter tab, which shows cryptocurrency tweets in real-time, you will get similar stats too, depending on what people are talking about at that time. You can see here for Twitter, Doge is the unexpected coin in the top list.
However, Doge is one of the most popular coins for social media memes, which gives it more visibility and eventually drives its price. However, as you can see in our overall ranking, Doge is not in top 10 because its other platform scores are not as high. But it’s increasing, and so is the price of Doge!
It is also challenging to calculate the overall social score. We cannot just take relative volume for the overall social score, because in that case, everything other than Bitcoin is usually negligible. As a result, their rank in one platform does not reflect as much in overall ranking. Furthermore, the score from another platform where the scores are closer to Bitcoin (e.g. Reddit active users), have a stronger impact on the score. We solve this problem by preserving the rank and giving a rank probability score.
How to Utilize the CoiningAI SocialRank
Combining all the platform ranks, we get the Social Ranking. This tells us, based on social buzz, mainstream media buzz, and exchange adoption, how the coins are ranked. We calculate the Rank difference by taking the difference in ranks between Social Rank (http://coining.ai/social.html) and current coin rank (http://coining.ai/coins.html based on market cap, trading volume and normalized price). This difference tells us if the ranking based on social buzz is different from the current coin ranking.
Essentially, the Social Ranking gives a sense of overpriced and undervalued coins in general. At the same time, if something picks up on all platforms, there is a high chance that the price will increase in the coming hours or days. Influencers talk about a coin first in YouTube / Twitter, then it gains more buzz on Twitter and Reddit, then the mainstream media attention and price follow. It’s this sort of analysis of the patterns that help understand how price increases follow from these social rankings.
For example, take Bitcoin Cash and Litecoin. We have consistently seen on our social page that Litecoin has significantly more social buzz compared to Bitcoin Cash. The question is, however, is Litecoin going to exceed Bitcoin Cash in terms of market cap and trading volume? It should, but whether or not it happens is hard to predict. Even if it does happen, it won’t happen in a matter of one day. Though, according to Charlie Lee, it will happen this year!
Next, if you check the ranking in the screenshot above, one significant difference is for Monero. Monero’s coin rank with the combination of current market cap and trading volume is 10 spots behind when compared to Social Rank. This means that, with all the increased social buzz, it should be ranked much higher, but that is not reflected in price yet. Thus, Monero could be a good investment. Furthermore, if you check the price history after February 16th, when the screenshot was taken, Monero’s price actually increased from $280 to $330 (17% increase) on the next day!
Finally, here’s an example of another extreme: negative rank difference. This means that a coin has much higher value and rank compared to the social buzz it gets. If you check the list, the first prominent coin you would notice is Cardano (ADA). It is a great coin with great future, but it’s priced as if future accomplishments have already occured.
Furthemore, it is still not maintaining the same interest from social media and mainstream media, so the price is not likely to stay at this level. Or, it might just maintain and increase the price just fine. The goal of this tool is to help you find coins that are overpriced or undervalued, but you have to be the judge and decide if these prices make sense to you. You also need to check these social ranking for a few days, not just one snapshot’s ranking, to find coins that are legitimate.
Remember, if a coin does not have a social buzz right now, that does not mean its a bad coin. They could be working hard to build something and when they release it, the price will skyrocket. You don’t want to buy after everyone talks about it either. For this reason, you also want to do coin research to better judge if these coins actually have potential. You can do that by going to the coin detail page, clicking the coin name from our rank lists, and checking the YouTube videos, news, Reddit page, official Twitter posts, and all the information housed there.
Another important reason for overpriced coins is because of significant coin supply. You would see the same thing again and again. For example, Ripple (100B supply), Cardano (45B), Stellar (100B), and TRON (100B). These are all great coins with great potentials. However, these coins are usually slightly overpriced compared to what their price should be, which is caused by the coin having a significant maximum supply and less current supply, thus the coin price seems low, but the actual price is pretty high.
If you check the normalized price (http://xai.coining.ai/price.html), which is calculated considering the same number of coin supply as Bitcoin and gives a good understanding of the price you are actually paying for the coin and if it is overpriced. If the normalized price is unexpectedly high for a coin, it is likely to fall sometime soon.
Coin Detail Pages for Fundamental Research
Do Your Own Research (DYOR)
There is always FUD (fear, uncertainty and doubt) in the crypto market and stock market. Fundamental research is required to avoid FUD, be it for cryptocurrency or traditional stocks. If you know that a coin has a great future and you believe in it, you can buy that coin or stock when there is panic in the market and the price is really low. Then, when other investors put confidence in the market and the price is high, you can sell some of your holdings for a profit. [Check out our other article on how to take out periodic profits and some other investment strategies.]
What are the most useful tools for fundamental research? Well, that’s where Coining.AI comes in…
We show an one-stop interface for doing fundamental cryptocurrency research using Coining.AI’s coin research tools. We are displaying:
The news page is home to all of the latest and most important information for a coin. These links and headlines are pulled from some of the most reliable and respected news sources on the web, so you know you’re getting accurate and up-to-date crypto information.
With all of these links and headlines in one place, it’s easy to quickly get a recap of the latest news for a coin and learn what exactly caused that latest price dip or price hike. If you want to survive the crypto roller coaster, it’s important to stay current on the news, and that’s what we’re here to offer.
YouTubers are big influencers of the the cryptocurrency market itself. What they say can have a dramatic effect on the price of coins, so it’s important to stay up to date and learn what’s going on for a particular coin. Additionally, videos can also offer interactive graphs and charts to see price trends over time!
The YouTube tab on the coin detail pages is home to the latest and most popular YouTube videos. There are sections for the top videos of all-time, which offers a good summary for a coin, as well as the top videos for the last hour, day, week, and month.
Reddit is one of the top sources for crypto news on the web, and our dedicated Reddit tab is home to all of the top discussions from coin subreddits. We bring in the latest posts from these subreddits, helping you stay current and survive the lightning-paced crypto market.
Reddit can also be a great place to meet and interact with fellow cryptocurrency fans. These connections can be instrumental in staying up to date and making the right investments in crypto trading.
Lastly, the dedicated Twitter page shows the official Twitter accounts for the latest updates from each coin.
How to Access the Coin Page?
You can click on the coins directly from our CoiningKit page:
- http://xai.coining.ai/coins.html: Coin Ranking based on Market Cap, trading Volume and Normalized price
- http://xai.coining.ai/social.html: Social Rank combining News / YouTube / Twitter buzz, active Reddit users and Exchange adoption
- http://xai.coining.ai/price.html: Normalized Coin Price to identify overpriced and undervalued coins
- http://xai.coining.ai/goodbuys.html: Prospective short/medium term good coins to buy based on high trading volume and lower price.
- http://xai.coining.ai/altcoins.html: Prospective alt-coins with low price and potential to increase in price.
Another way would be to replace the symbol here for BTC: http://xai.coining.ai/coin.html?symbol=BTC. This is not recommended though, because we might use a different symbol for a coin.
As we’ve said again and again, the cryptocurrency market can be intimidating. With the right amount of due diligence and patience, however, you can learn to become a smart and profitable investors. Our goal at CoiningAI is to make it as easy as possible to give you the tools necessary to succeed.