Fundamental and Technical Analysis

Over the past few weeks, we’ve seen Bitcoin and other cryptocurrencies price increase a significant amount. This is the largest increase we’ve seen in a while and hints towards a possible end to an almost two year bear market. While it’s impossible to say for sure what lies ahead, there are a few ways to educate yourself about an assets possible upcoming price movement.

Technical Analysis

Technical analysis can be best explained as a method of price discovery that takes a look at statistical trends in data. This can be anything from an assets trading volume to its weekly highs and lows.

A majority of the time, you’ll see this data displayed on a chart or graph making it easier to read. Tradingview is one of the most popular technical analysis websites and has historical charts for nearly every cryptocurrency.
Fundamental Analysis

Fundamental analysis is the other popular method of price discovery and looks at quantifiable measures of use. In cryptocurrency, some interesting examples of fundamental analysis would be a google keywords search volume or the sum of all transactions on a cryptocurrency network.

In Bitcoin’s case, the number of transactions per block is reaching record levels. This is a great sign, as it shows that more and more people are finding uses for the Bitcoin network, hinting that the value of the network may or may not be more valuable than it’s currently priced at.

So… Which Type Analysis is More Useful?

As you might expect, a combination of both types of analysis are vital to trading and investing successfully. Looking at charts are a great way to learn from the past and recognize patterns. However, at the end of the day, a project that is demanded and used heavily will always win out in the long run. This is exactly what CEDEX is attempting to build with our online trading arena and upcoming diamond ETF.

Which method of analysis do you use more often? Let us know in the comments below.