Crypto market analysis Welcome to the third episode of our lunar trading series. In the last episodes, we covered the basics of crypto trading and we dived into some of the strategies traders and investors employ from huddling today trading. If these strategies are going to work, you need to analyze the market. And that’s what we’re going to dive into today at the end of the day. If your goal is to make a profit, only one thing really matters. Buy low. Sell high. Of course, that simple statement is a lot easier said than done. No one can predict the future, not even Elon Musk.
1. Crypto market analysis
Crypto market analysis If they could, we’d all be rich. So the key is to identify when the lows and highs are more likely to come to do this. There are certain methods of market analysis. The crypto traders and investors commonly used in their decision making process. The two most common forms of market analysis, a technical analysis and fundamental. Both have their limitations and schools of thought against the theories, but using the right way with logic, they can help you to make more informed trades.
Let’s start off with technical analysis. So what is technical analysis? Technical analysis is built on the premise that history repeats itself. It focuses mainly on historical market data such as trading volume and past pricing trends. Essentially, fair agreed with technical analysis.
You look at this data and use it to build a clearer picture of the market sentiment by identifying patterns of repeat behaviors. Are people buying or are they selling? They acting out of fear or greed? We’re essentially trying to figure out what people did and use this to predict what they will do. This can help you to make calculated predictions. But when the market will be bearish, trending down or bullish trending up, this method of analysis essentially assumes that price movements aren’t random and the past patterns will hold in the future.
2. Crypto market analysis
But the thing with assumptions is any number of factors influence the price move in a specific direction. Technical analysis only really looks at supply and demand and the price of a coin as the price goes up. You can expect it to come bearish at some point as people try to capitalize by selling their coins and the price will fall as other traders try and get out. Believing is the best price they will get. Watch also ai marketing website explanation
And so the cycle continues. If used correctly, technical analysis can certainly form a pillar of your thought process, and some traders swear by it. At the same time, though, you can’t predict the future simply by looking at the past. Which brings us to fundamental analysis, fundamentals is more of a big picture approach, like who is running the company or the business behind an asset, what their reputation is, who their competitors are, and looking at the overall industry in general. For example.
Cryptocurrency market analysis 2021
if you judged the intrinsic value to be lower than its current market price, you can trade accordingly and in theory, make a profit. You can also look at things such as transaction volume and user activity to gauge consumer demand as well as retail adoption. And of course, finally, global economic events can exert a powerful influence on cryptocurrency prices. It is important to incorporate these economic shifts when using fundamental analysis in a trading strategy. This includes both scheduled and unscheduled events like the Bitcoin halving or government intervention.
A highly publicized and important crypto related event such as the harvest, for example, has a clear impact on the future supply of the currency. You can plan for this and incorporate it into your models. Equally, an unscheduled event could have an even greater impact. This is obviously harder to take into account. We still need to know how to respond to such an unplanned events if and when they occur. When it comes down to choosing which techniques to use Crypto market analysis. wath also WHAT IS RIPPLE (XRP)
a combination of both is probably a good idea if you do decide to start trading, made sure to be cautious during this phase and never invest more than you can afford to lose. Do your own research. The more you know, the more successful you will be. Remember, this is an answer no one gets on their first tries. Don’t forget to subscribe and smashed that bell so you never miss a thing. And as always, hashtag Terman Crypto market analysis.