Altcoin Risk Scoring Explained: How to Know When to Buy an Altcoin
By Menno — 13 years in crypto, 3 bear markets survived, zero paid promotions
Last updated: March 2026
Altcoin risk scoring assigns each coin a number from 0 to 100 based on multiple factors including the bi-weekly RSI, distance from the 4-year high, market cap, token unlock schedule, and project liquidity. A score near 0–15 historically marks a buy zone; a score near 80–100 marks a sell zone. The system removes emotion from altcoin decisions by turning complex multi-factor analysis into a single actionable number.
Key Takeaways
- •The altcoin risk score converts multi-factor analysis into a single 0–100 number, removing emotion from buy/sell decisions.
- •The average historical bottom for altcoins tracked by Menno sits around score 10; the average top sits at 80–90.
- •Token unlock analysis requires evaluating size, timing, project liquidity, and recipient — not just whether an unlock is scheduled.
- •A score of 0–15 is the historical accumulation zone; scores above 70 signal the historical sell zone.
- •Using risk scores across your full watch list in a single view lets you compare relative opportunities without analysis paralysis.
Why Altcoins Need a Risk Framework
Altcoins are more volatile and more complex than Bitcoin. A Bitcoin investor can lean heavily on macro indicators. An altcoin investor also needs to account for project-specific factors: token supply schedules, liquidity depth, fundamental revenue metrics, and sector positioning. Without a framework, altcoin decisions devolve into gut-feel guesses driven by price action and social hype.
Menno developed his altcoin rules as a systematic answer to that problem. The goal is to translate everything relevant about a coin's current risk profile into a single number so that decisions become clear: "Are the indicators giving a green light? Cool, I'm buying." The number takes his emotion out of it entirely.
The average bottom across the altcoins Menno tracks sits around 10 on the 0–100 scale. The average top sits between 80 and 90. Knowing that a coin currently scores 14 — regardless of how its chart looks or what Twitter is saying — immediately tells you where you are in its historical risk cycle.
The Components of the Risk Score
The risk score aggregates several weighted inputs:
Understanding Token Unlocks: The Detail Most Investors MissPremium
Token unlock analysis is where the altcoin risk score diverges most sharply from what most retail investors consider. When people see an upcoming unlock, they typically react with a blanket negative: more supply, bad for price, avoid. The nuance is far more important than that binary reaction.
How to Read Your Watch List Risk ScorePremium
Included with the full lesson.
Frequently Asked Questions
Is the risk score a buy or sell signal?▾
It is a zone indicator, not a precise entry or exit signal. A score of 12 does not mean buy today; it means you are in a historically low-risk accumulation zone where DCA buying has produced good outcomes. Your actual buy timing is managed through a DCA plan rather than a single entry.
What does it mean if a coin I want to buy has a high risk score?▾
A high score — above 60 or 70 — means the coin has already recovered significantly and is trading in territory where historical buyers have been disappointed. The risk-reward ratio is less favourable. The recommended approach is to wait for a pullback that brings the score back down rather than chasing the current price.
Why do token unlocks matter so much?▾
Token unlocks increase the circulating supply. More supply hitting the market with the same demand means price pressure. Seed investors and early VC holders typically have cost bases thousands of percent below current market prices, giving them massive incentive to sell. If a large unlock is imminent and recipients are early investors, short-term sell pressure is a near-certainty.
Can I build my own risk score?▾
Yes — the components are publicly available. You need the coin's bi-weekly RSI (from any charting platform), its percentage decline from all-time high (from CoinGecko or similar), market cap, and token unlock data (from TokenUnlocks.app or Messari). Weighting them requires experimentation and historical backtesting to refine.
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Get Full AccessNot financial advice. All content is for educational purposes only. Crypto investing involves significant risk. Always do your own research.