#054 - 3 underrated strategies to find the next 10x altcoin

Strategy 1: Finding Altcoins Based on Volume

The TLDR of this first strategy is to filter coins with a market cap between $10 million and $100 million.

• It’s the sweet spot: big enough to have stability, small enough to grow.

• This first strategy is arguably the best way to start researching for new altcoins, and is what I used in 2017/2018.

  • I like to use coincheckup as it has a powerful filtering option.

  • Click on filters and select mcap between $10 & $100m and a trading volume of at least $5m.

• If you want to be more specific in your search and want to find the best coins for each narrative, you can also go through each category individually.

  • For example, you can dig deeper into interesting AI crypto projects.

Before you start researching this particular altcoin, you should definitely do a quick check to see if the trading volume makes sense.

• Sometimes exchanges create fake volume by trading the same coin back and forth. This is called wash trading.

• For example, here, MXC has a trading volume of $439m. This looks a bit sus.

• If I click on this coin and then click on markets, I can see that there is only one exchange, showing a $439 m trading volume. It’s not a reputable exchange.

• It also has only $35k trading volume on Kraken, which is a tier A exchange.

Let’s look at a good example: Verge XVG

Let’s look at a good example: Verge XVG

• Its market cap is $105 m, and the trading volume is 1.23x higher than that.

• This is something that I would find interesting, and I would want to investigate further.

• But first, let’s check the volume on different exchanges.

  • In the screenshot below, you can see that there are many tier A exchanges with a good amount of volume. The volume looks legit.

Here are the next steps I would take to see if this coin might be a good investment:

• Look at the chart on tradingview on the daily or 3-day timeframe. For longer-term investments, I like to use the weekly timeframe.

• I use various indicators like LDC and VMC to get a quick view if the current asset is overbought or oversold.

• You can read the ‘5 profitable investing strategies that allowed me to buy BTC at $16k

2. Find related news and info I will use Google and X (Twitter) to search for information and news surrounding the project.

   • On Twitter, you can use the cashtag $XVG

• Based on the information that I find, I will decide if this is a good entry point. If not, I will set an alert on tradingview for my buy signal.

The next strategy is a good one if you want to see what projects or ecosystems smart money is interested in before the price takes off.

Strategy 2: What’s TVL, and why should you care? 

TVL stands for Total Value Locked.

• It’s a good measure to see what investors find interesting and how they are allocating their capital. If a lot of money trusts a protocol but prices haven’t spiked, you might be in early. Get ready for the ride up as others catch on.

• Some reasons why they are moving their capital to an ecosystem:

  • Possible airdrops

  • Anticipate that good projects will launch in this ecosystem

• In a nutshell, It’s a snapshot of commitment—how many investors are really putting into these networks.

• So if you are looking for a hint on which ecosystem might pump next, looking at the ecosystem TVL is a good start.

Here are the steps you can take:

• Go to the defillama chains section and sort by 1-month TVL change in %.

• IMO, the two chains that are interesting are Linea, with $246m in TVL, and Scroll, with $85m in TVL.

  • Both don’t have a token yet. So these are ideal platforms to bridge to and use some protocols on them.

If the chain in question has a token, I like to look at the MCAP/TVL ratio.

• If the chain in question has a token, I like to look at the MCAP/TVL ratio.

  • You can use this to see what the ratio looks like between Marketcap and total value locked.

Here’s an example between $SUI and $SEI:

• SUI has a TVL of 650m and an MCAP/TVL ratio of 3.58

• SEI has $27m TVL and a MCAP/TVL ratio is 50

• When just looking at these two metrics it’s clear that SUI is the better bet.

SEI has $27m TVL and a MCAP/TVL ratio is 50

when just looking at these two metrics it’s clear that SUI is the better bet.

Strategy 3: Find out who influencers are following

Look at which projects are being followed by top crypto Twitter accounts. 

The easiest way to do that is with X02. It’s a free, nifty tool that I use on a regular basis. (I can’t believe I’m sharing this alpha. As a thank you, you should definitely share this newsletter with a friend to help me grow.)

There are quite a few filters you can play around with, such as ‘has a coingecko’, ‘discord’, ‘website’, and ‘founder’.

• The projects that appear here might be much more risky, so proceed with caution. You can also use it to find interesting new alpha-sharing accounts.

As an example if I use founder as a filter I will go through the list and look for exponential follower growth:

@TheHiddenKillua looks like an interesting watch.

I will then look at who is following him and which projects he’s working on/with. In this case it’s fantasy top

• I’m already intrigued as they are building on blast. The next steps I would take is researching more info about this project and figuring out if I want to allocate my capital or interact with the protocol to secure an airdrop.

That’s it. Do these steps a few times a week and you will be bound to be successful.

Onchain Edge Index Update

The current value is 61. It’s definitely dropped quite a bit since the OEI ATH of 83.7. That’s mainly due to the strong drop of the puell multiple after the halving.

• I also want to thank everyone for emailing their feedback on if I should do the Google sheets public version or telegram.

• The good news is that I will do both. However, I will roll out the Google Sheets version in next week's newsletter. I’ll also create a short tutorial on how to use the onchain edge index for long-term investing.

• The next step is to create a Telegram bot so that you can be alerted as soon as there are significant changes in the index.