How to perform a basic analysis of cryptocurrency investment
The cryptocurrency world has in recent years in the wild run, when prices have fluctuated and investors seek a return that often does not match traditional investment. As a result, investing in cryptocurrency can be both exciting and frightening. Although the potential for high returns is undeniable, it is necessary to distinguish between hipte and fundamentals when making investment in cryptocurrency.
What are the main factors?
Before immersing itself in the main analysis, let’s define what the main factors mean in the context of cryptocurrency. The main factors mean the main properties of cryptocurrency that can affect its value and performance. These factors include:
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- Market mood : A general attitude of investors, including bull or bear moods.
Maintenance analysis of cryptocurrency investment
To carry out the main analysis of cryptocurrency investment, follow the following steps:
- Select Cryptocurrency : Choose cryptocurrency with strong bases and growth potential. Explore the coin white paper, plan and team to understand your basic technology and use.
- Evaluate supply and demand : Analyze supply and demand dynamics in the chosen cryptocurrency. Look at the price charts and compare them to historical data to set models and trends.
- Analyze technical indicators : Use technical indicators such as the average average, relative strength index (RSI) and Bollinger bands to evaluate the pulse and sentiment of the coin.
- Evaluate the regulatory environment : Research Government policy and laws related to cryptocurrencies in the chosen market. Consider factors such as taxation, licensing requirements and the rules for fighting money laundering.
- Evaluate market moods
: Look at market trends and sentimental indicators such as social media conversations, forums and online communities to evaluate investor enthusiasm cryptocurrency.
Case analysis:
Let’s examine the main Bitcoin (BTC) analysis using the actions described above.
* Supply and demand: The total BTC supply is 21 million and the total market capitalization exceeds $ 2 trillion. This creates a strong demand imbalance.
* Technical analysis: BTC price chart shows a consistent increase in increase, and between its short -term and long -term moving averages is a strong bull crossing. RSI is 70, indicating too much conditions.
* Regulating environment: Bitcoin operates in an unregulated market, making it attractive to government -based cryptocurrencies for their own purposes. The European Union regulatory system also led to interest in the BTC as a potential value storage.
* Market mood: Twitter conversations and online forums filled with Bullish towards Bitcoin, caused by a recent increase in prices.
Conclusion
In order to carry out a major analysis of cryptocurrency investment, you need to pay attention to details and understand the main factors that promote cryptocurrency prices. By evaluating the dynamics of supply and demand, analyzing technical indicators, assessing the regulatory environment and researching market moods, investors can deepen their chosen cryptocurrencies and make reasonable investment decisions.