Stay updated on regulatory policies in different regions. Avoid projects that do not comply with local laws, such as those without proper licensing or those that involve illegal fundraising. Check the project's compliance statements and its attitude towards regulation. For example, if a project operates in a region with strict cryptocurrency regulations but has no clear compliance measures, stay away from it.
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36. On-chain activity trends—active addresses, transaction count—signal adoption momentum. Growth supports bullish cases, while stagnation implies weakening demand. These are leading rather than lagging indicators.
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Study past crypto bubbles (2017 ICOs) and crises (LUNA collapse) to identify red flags: excessive leverage, poor tokenomics, and hype over fundamentals. Lessons: avoid overconcentration, prioritize audits, and distrust unsustainable growth. Apply via risk checks (leverage limits, fundamental screening) and diversifying across uncorrelated assets to mitigate repeat mistakes.
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