Fundamental Analysis in Trading: How to Evaluate Cryptocurrencies

After mastering technical analysis, it’s important to understand why the market moves at all. Technical signals show when to enter a trade, while fundamental analysis of cryptocurrencies helps determine what is worth entering. Many traders lose funds because they only watch the chart and don’t study what stands behind a project.

In this article you will learn:

• how to analyze a cryptocurrency by key indicators and open-source data;
• which crypto metrics influence a token’s long-term price;
• how to tell that a project is alive rather than abandoned by its developers;
• how to choose a promising coin.

In the previous article of the series, we covered Technical analysis: how to read charts and find entry points. Now let’s see how to understand why price rises or falls and which projects truly deserve attention.

Fundamental analysis of cryptocurrencies helps assess a digital asset in terms of technology, team, tokenomics, and network activity. If technical analysis reflects price movement, fundamental analysis shows what stands behind a project and why it develops. Technical analysis answers the question of when to enter a trade, whereas fundamental analysis helps you understand why the asset deserves attention in the first place.

Sometimes a chart may show growth, but if a project has no users, the crypto project’s GitHub activity is absent, and it’s unclear how it earns money, such growth is unsustainable. Conversely, a coin with well-designed technology and a growing ecosystem often recovers even after strong corrections. Fundamental analysis is especially important in the crypto market because, according to CoinMarketCap, more than 40 percent of projects cease operations within the first two years. Checking the basic indicators helps avoid investing in tokens without real value.

Fundamental analysis is needed not only by investors but also by traders. It helps you understand how justified a token’s price is and whether it has growth potential.

The main goals of crypto fundamental analysis are:

• to assess the project’s real value rather than just market noise;
• to understand how sustainable the tokenomics is and how active the ecosystem is;
• to separate promising coins from speculative ones;
• to find undervalued assets that the market hasn’t noticed yet;
• to avoid buying tokens “on hype” before a crash.

When you know how to analyze a cryptocurrency, it’s easier to determine where there’s a long-term idea and where a project was created for short-term hype. Proper evaluation of a crypto project helps you make decisions without emotions and build a data-driven strategy.

Cryptocurrency fundamental factors include several key areas that allow you to look at a project from all sides. They help you understand how reliable the technology is, who stands behind the team, and how active users are within the network.

First, it’s important to understand why the project was created at all. It should solve a real problem or make existing infrastructure better and more efficient. For example, Layer 2 solutions, zk-technologies, and DePIN networks generate steady interest because they help improve scalability and increase the level of privacy.

The cryptocurrency market is built on trust, so team transparency matters greatly. When project members openly list their LinkedIn profiles, actively work on GitHub, and speak publicly, this inspires more confidence. If the creators hide their names and don’t share information, it’s a reason for caution. Experienced teams such as TRON DAO and Solana Labs regularly publish reports and news, which helps strengthen investor trust and confirms the project’s reliability.

In simple terms, tokenomics describes how a coin’s economy is structured. It includes the total token supply, the percentage already in circulation, the issuance model, and mechanisms such as burning or staking.

Examples of different tokenomics models:

• Bitcoin has a 21 million coin cap, which creates scarcity and makes the asset resistant to inflation.
• TRX uses a partially inflationary model, but high demand is supported by constant user activity on the TRON network.
• For Solana and Ethereum, the number of new coins depends on the amount of burned fees and the activity of network participants.

When evaluating a project, you should look at how many tokens are already in circulation and how many are yet to be issued. If a large share of the coins, for example 60–70 percent, belongs to the team or a foundation, there’s a risk that selling these tokens may push the price down in the future.

A strong project is always backed by a live ecosystem and active users. According to Tronscan, as of October 2025 the TRON network processes an average of about 8.7 million transactions per day, and the number of active addresses exceeds 2.4 million. Ethereum remains the leader in the DeFi sector with total value locked (TVL) of more than $52 billion, while Solana shows confident growth with around $26 billion according to DefiLlama. Such network activity reflects real user interest and is one of the most reliable signs of a project’s sustainability.

A strong community, strategic partnerships, and listings on major exchanges make a project more resilient and visible in the market. TRON collaborates with Tether and BitTorrent, Ethereum interacts with leading DeFi platforms, and Solana integrates with Visa and Shopify. Such partnerships strengthen user trust and show that the technology is in demand.
When all these components work in harmony, a project gains a solid foundation for sustainable development and gradual growth in the future.

The cryptocurrency market is open to everyone, and almost all information is publicly available. It’s important not just to find data, but to know where to look and how to read it correctly.

Here are the main platforms that will help you analyze a cryptocurrency before buying:

• CoinMarketCap and CoinGecko provide information on market capitalization, trading volumes, and the share of tokens in circulation.
• DefiLlama shows total value locked (TVL), DeFi protocol activity, and the number of networks they operate on.
• TokenUnlocks lets you track when and in what amounts tokens will be unlocked, as well as study their distribution plan.
• GitHub helps you understand how actively development is conducted and how often the project’s code is updated.
• Tronscan, Etherscan, and Solscan show network statistics, the number of addresses, and transaction volume.
• Nansen and Dune Analytics allow you to study the movement of funds on-chain and wallet behavior.

Consistent use of these tools helps build the habit of fact-checking and making decisions based on real data. If a project claims constant updates, but its GitHub shows no activity and DefiLlama data shows falling TVL, this may be a warning sign.

Even attractive tokenomics and loud claims don’t mean a project really works. You can verify this by real activity, since a “live” project always evolves and doesn’t disappear from view.

To make sure the team is truly working, pay attention to several signs:

• how often the repository is updated and news is posted on social networks;
• whether new partnerships, listings, and integrations appear;
• whether the audience grows gradually without sharp spikes in activity;
• whether the team participates in conferences, AMA sessions, and community discussions;
• whether there is a balance between marketing and product, because if a project is heavily advertised but not updated, that’s an alarming signal.

According to GitHub Metrics, in October 2025 more than 300 active developers work monthly in the Ethereum and TRON ecosystems, and about 190 in Solana. These figures show that the projects are indeed developing and maintaining technical stability.

A truly “live” project always remains visible, continues to release updates, improves functionality, and interacts with the community even when the market is in a downturn.

TRON is considered one of the most resilient networks in the cryptocurrency industry. According to CoinMarketCap, its market capitalization in October 2025 exceeds $12.8 billion, and the daily volume of USDT TRC-20 transfers reaches about $45 billion. This is the largest ecosystem for stablecoins, which continues to grow even amid high competition.

From the perspective of fundamental crypto analysis, TRON combines a stable economy, active development, and a high level of usage. The network processes an average of 8.7 million transactions per day, and the number of active addresses exceeds 2.4 million. These metrics confirm that the project not only exists but has real-world application.

TRON’s tokenomics is designed to maintain a balance between issuance and demand. TRX is used to pay for transfers in the TRC-20 network, which creates constant demand for the token. A portion of coins is regularly burned, helping to contain inflation.

The network’s infrastructure is stable and time-tested. In recent years there have been no significant outages, which increases user and developer trust. The crypto project’s GitHub activity remains high, code updates are released regularly, and validators actively support the ecosystem.

TRON has strengthened its position thanks to partnerships with Tether, BitTorrent, and major Asian payment platforms. These integrations ensure steady demand for USDT TRC-20 and form a stable turnover of funds. As of October 2025, the total volume of funds in the ecosystem exceeded $9 billion, making TRON a leader among networks with real economic activity.

TRON can be viewed as an example of a project with strong fundamentals, where technology, economics, and community activity are in balance. It shows that sustainable growth is achieved not through advertising but through ongoing product work and organically formed demand.

Fundamental and technical analysis work together and reinforce each other. The former helps you understand which asset deserves attention, while the latter shows when it’s better to enter a trade. If a project is growing, has an active community, stable tokenomics, and a strong development team, that’s a positive fundamental signal.

To use both approaches effectively, keep a few practical rules in mind:

• fundamental analysis shows the overall direction and helps choose promising coins;
• technical analysis determines entry and exit timing as well as risk levels;
• combining data from both approaches reduces the influence of emotions and makes decisions more deliberate.

Before buying, make sure the chart confirms the trend and support levels align with rising volumes. Only the combination of technical and fundamental analysis helps build a logical strategy and make fact-based decisions. When the fundamentals are weak, technical signals lose reliability, while with a strong foundation even a temporary correction can be a good entry point.

Fundamental analysis can be called the internal engine of price, as it shows which projects grow thanks to technology and which exist only due to noise and hype. Even in an unstable market, it’s important to understand where you invest your funds. The deeper the analysis, the lower the chance of running into a scam or an artificially inflated project.

Fundamental analysis of cryptocurrencies helps not just follow trends but understand what is really happening in the market. When a trader evaluates an asset comprehensively—considering technology, team, tokenomics, and network activity—each decision becomes conscious and well-grounded.

The next article in the series will examine how to apply technical and fundamental analysis in practice. It explains how to combine these approaches to find entry points and build a sustainable trading strategy.