Bitcoin
BTC$56 258.13

-1.35%

Ethereum
ETH$4 489.75

-2.02%

Binance Coin
BNB$611.27

-1.84%

Tether
USDT$1.000332

-0.08%

Solana
SOL$228.23

0.71%

Cardano
ADA$1.67

7.55%

Basics Of Bitcoin Market Analysis


September 2021

Many investors who are new to bitcoin don't know much about analysing individual digital currencies, so they can benefit significantly from learning some quick tips on the matter. This article provides some straightforward methods investors can use in order to make better-informed decisions about whether to buy Bitcoin. Investors who are considering Bitcoin should keep in mind that there are three basic types of market analysis: fundamental, analysis and sentiment.

Fundamental analysis

Fundamental analysis looks at key variables that affect the supply and demand surrounding a digital currency. This is a perfectly reasonable approach, as an asset's price is a function of supply and demand.

Technical analysis

Technical analysis involves looking at market data—for example, price and trading volume) in order to get a better sense of conditions.[1] By reviewing this information, technical analysts hope to get a better idea of what the market will do going forward.

Sentiment analaysis

Sentiment analysis involves getting a better sense of the mindset of traders. The market consists of investors who collectively cause prices to move. If an investor can get some sound insight into what they are thinking, they may be able to make better-informed decisions. One practical way to get a better sense of the sentiment surrounding a digital currency like Bitcoin is to look at the long and short data that is available. Bitfinex, for example, has provided much of this information to the public through its API. Another potential source of information is Google Trends data, which can provide insight into search interest for key terms like "Bitcoin."

Learn The Economics Of Bitcoin

If an investor wants to be ready to make well-informed decisions regarding Bitcoin, they can benefit greatly from learning about the economics surrounding the digital currency. While some may think that Bitcoin is merely a technology, that is a very superficial assessment, as it's an economic system made possible by the existence of digital currency.

Learning about the economics surrounding Bitcoin can compel an investor to explore many questions, for example "What is money?" and "What makes money valuable?"[3] While these questions may seem a bit more theoretical, investors who are considering Bitcoin need to learn more about practical figures, such as the digital currency's supply. Bitcoin's total supply is fixed at 21 million, while roughly 17.4 million units of this digital currency had been mined at the time of this writing (December 2018).[5] Another key metric is market capitalisation (market cap), which is a measure of an asset's total value. This metric can help an investor get a quick glimpse of Bitcoin's total value.

Investors should also keep in mind that many units of Bitcoin have been lost. There are plenty of anecdotes about this sort of thing, such as a person throwing away (or simply misplacing) their private keys, which would prevent them from being able to access their bitcoins.

According to an estimate provided by blockchain research firm Chainalysis, between 2.78 and 3.79 million units have been lost forever. Chainalysis arrived at these figures after performing some thorough empirical analysis on the blockchain, the distributed ledger that records all of Bitcoin's transactions.

Don't Fall Victim To Hype

Investors who are thinking about getting involved with Bitcoin should remember that the entire digital currency market has historically experienced some very sharp volatility. The total value of this market climbed significantly in 2017, for instance, from roughly US$17.7 billion at the start of the year to roughly US$600 billion at the end. This represented a gain of more than 3,000%.

While this bull market was certainly impressive, the cryptocurrency market dropped significantly the following year, trading close to US$135 billion in November 2018. This figure represents a decline of more than 75% from the start of 2018.

Summary

When evaluating Bitcoin, potential investors can benefit from harnessing fundamental, technical and sentiment analysis while also learning more about the economics of Bitcoin, namely the various factors that affect supply and demand. These variables are crucial, since price is a function of supply and demand. Also, investors should remember that hype plays a big role in the digital currency markets, and they must be wary of how it can affect the market's movements.

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 75.2% 52 $56 258.13 -1.35% -3.39% $1 062 685 871 647 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 82.8% 32 $4 489.75 -2.02% 0.62% $532 409 655 839 ETH 7 days price change
3 Binance Coin (BNB) BNB Binance Coin predictions 80% 34 $611.27 -1.84% -6.27% $101 960 292 775 BNB 7 days price change
4 Tether (USDT) USDT Tether predictions 93.2% 1 $1.000332 -0.08% -0.03% $74 127 743 219 USDT 7 days price change
5 Solana (SOL) SOL Solana predictions 70% 59 $228.23 0.71% 10.70% $69 756 769 207 SOL 7 days price change
6 Cardano (ADA) ADA Cardano predictions 63.6% 75 $1.67 7.55% 1.04% $55 541 807 746 ADA 7 days price change
7 XRP (XRP) XRP XRP predictions 68% 69 $0.966682 -1.39% -6.74% $45 673 121 634 XRP 7 days price change
8 USD Coin (USDC) USDC USD Coin predictions 95.6% 2 $1.000586 0.01% 0.05% $39 076 707 256 USDC 7 days price change
9 Polkadot (DOT) DOT Polkadot predictions 62% 77 $35.31 -2.83% -9.08% $34 868 955 794 DOT 7 days price change
10 Dogecoin (DOGE) DOGE Dogecoin predictions 59.2% 80 $0.206922 -0.17% -5.39% $27 388 014 340 DOGE 7 days price change
11 Terra (LUNA) LUNA Terra predictions 69.6% 68 $66.14 3.27% 50.17% $25 662 261 357 LUNA 7 days price change
12 Avalanche (AVAX) AVAX Avalanche predictions 61.2% 75 $106.91 -9.78% -8.11% $23 943 836 667 AVAX 7 days price change
13 SHIBA INU (SHIB) SHIB SHIBA INU predictions 65.6% 78 $0.000042 -2.73% 1.55% $22 792 818 490 SHIB 7 days price change
14 Crypto.com Chain (CRO) CRO Crypto.com Chain predictions 56% 89 $0.692197 -3.51% -8.23% $17 486 981 094 CRO 7 days price change
15 Polygon (MATIC) MATIC Polygon predictions 68.4% 63 $2.09 -0.73% 11.57% $14 682 483 901 MATIC 7 days price change

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