FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%

Basics Of Bitcoin Market Analysis


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.

#source

Related

Everything you Wanted to Know about Dogecoin
Everything you Wanted to Know about Dogecoin

Sometimes, the best things in life start as a joke, and Dogecoin is not an exception. Initially created as a joke in December 2013, based on the popular Doge meme of a Shiba Inu dog...

Advantages Of Using VPS for FX Trading
Advantages Of Using VPS for FX Trading

VPS is short for a virtual private server and it’s widely used for trading in the financial market. The VPS hosting service will be especially useful for traders who prefer...

Can you make money with crypto arbitrage?
Can you make money with crypto arbitrage?

Crypto arbitrage is the practice of and methodology behind taking advantage of price fluctuations in the price of various cryptocurrencies, such as Bitcoin or Ethereum. These variances...

Investment in Securities: Where to Start?
Investment in Securities: Where to Start?

Despite the fact that most people find trading on the stock exchange very confusing and incomprehensible, almost anyone can start investing in securities

How to Trade Forex on News Releases
How to Trade Forex on News Releases

A great advantage of trading currencies is that the forex market is open 24 hours a day, five days a week. Markets move because of news, so economic data...

Libertex: Dash Price Prediction for 2021-2025
Libertex: Dash Price Prediction for 2021-2025

At one point, investments in Dash were highly profitable. Many traders received significant gains from the Dash cryptocurrency when the price action surpassed the $1,500...


Editors' Picks

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.