How to Analyze the Crypto Market

Mr. Cevox

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December 22, 2024

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^{Technical and Fundamental Analysis (Full Guide)}

There are two great ways to analyze the crypto market:

_{1. Technical Analysis}

This trading strategies seek to predict price fluctuations in the short and medium term to buy and sell at the right time. Traders often base their decisions on the methodology.

Examples are

Chart Patterns
Candlestick Patterns
Moving Averages (MA)
Support and Resistance
Trendlines
Indicators and Oscillators
Volume Analysis
Price Action
Breakouts and Fakeouts
Time Frames

Technical analysis is a powerful tool for crypto and stock traders. By mastering chart patterns, indicators, and trendlines, you can make more informed trading decisions.

^{2. Fundamental Analysis}

First and foremost, you need to basically know who holds this crypto at its time. Who are these people and what they said in public and what is their model of business. Will they pack their bags after Segwit2x was canceled and moved to BTH because their business model required that? Or, is this a group of people who have enough money to buy out the whole market (akin to stock buybacks by major corps) and push the prices to the tops with the right timing strategy and enough foresight? Where are the BTH investors located? Is it predominantly Asia and what part?

Fundamental analysis looks at real-world data, project strengths, and external factors to determine whether an asset is undervalued or overvalued.

Examples are:

_{1. Project and Team Research}

What problem does the project solve?
Who is the team?
What are the roadmap and Vision:
What is the team's plan to encourage adoption?
What are the project's competitors?
Who are their partners (Collaborations with big organizations or governments)

Where to Find Information

Project websites, Whitepapers, LinkedIn profiles, GitHub repositories, Press releases.

_{2. Whitepaper Analysis}

What is the purpose of the Coin?
What are the technologies and Features?
How are the tokens created, distributed, and utilized?
Who are the coin major users?

Example: Bitcoin's whitepaper by Satoshi Nakamoto highlighted its use as a peer-to-peer decentralized currency, solving the problem of intermediaries in finance.

_{3. Tokenomics (Supply and Demand Factors)}

What are the total Supply?
What are the circulating Supply?
Inflationary vs. Deflationary?
Utility and Staking?

_{4. On-Chain Metrics}

What are the number of active Addresses?
What are the coin average transaction Volume?
What are the coin hash rate?

Check out tools like Glassnode, CryptoQuant, CoinMetrics for On-Chain Data

_{5. Market Sentiment}

Check News and Media Coverage
Check Social Media Trends
Check the Fear and Greed Index

Example: Elon Musk’s tweets about Dogecoin led to massive price spikes due to hype.

_{6. Regulation and Legal Framework}

Government Stance
Company's Regulation

Conclusion

Fundamental analysis helps you determine whether a cryptocurrency has long-term potential based on its real-world use, technology, and adoption metrics. Which the provided steps and tools above you can identifying undervalue and overvalue assets in the crypto market.

Pro Tip: Combine fundamental analysis with technical analysis for better decision-making. For example, identify a strong project with bullish fundamentals and use technical indicators to find the best entry point.

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