How to conduct fundamental analyzes for cryptographic investments
The world of cryptocurrencies has been in a wild race in recent years, with prices that float wildly and investors looking for returns that are often unparalleled by traditional investments. Consequently, invest in cryptocurrencies can be both electrifying and intimidating. Although the potential for high returns is undeniable, it is essential to separate the hype from the fundamentals when they conduct cryptocurrency investments.
What are the fundamental factors?
Before immersing yourself on how to conduct fundamental analyzes, we define what fundamental factors mean in the context of cryptocurrencies. The fundamental factors refer to the underlying characteristics of a cryptocurrency that can influence its value and its performance. These factors include:
- Duplicate and of the Offa : the balance between the number of coins in circulation (offer) and the capitalization of the total market (demand).
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Conduction of fundamental analysis for cryptographic investments
To conduct fundamental analyzes for cryptographic investments, follow these steps:
- Choose a cryptocurrency : select a cryptocurrency with a strong fundamental and a growth potential. Search the White Paper, the roadmap and the coin team to get an idea of its underlying technology and the case of use.
- evaluates the offer and the question : analyze the dynamics of the offer and demand in the cryptocurrency choice. Look at the price graphs and compare with historical data to identify models and trends.
- Analyze the technical indicators : use technical indicators such as mobile media, relative resistance index (RSI) and Bollinger bands to evaluate the momentum and feeling of the coin.
- Evaluate the regulatory environment : search for government policies and laws relating to cryptocurrencies in the chosen market. Consider factors such as taxation, license requirements and anti -money laundering regulations.
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Study houses:
We examine the fundamental analysis of Bitcoin (BTC) using the steps described above.
* Depost and question:
BTC’s total offer is limited to 21 million, while the total market capitalization is over $ 2 trillions. This creates a strong imbalance.
* Technical analysis: The price graph of BTC shows a constant rise tendency, with a strong bullish crossover between its short and long -term mobile averages. The RSI is at 70 years old, indicating hypercomposition conditions.
* Regulatory environment: Bitcoin operates in an unregulated market, making attractive for governments that wish to adopt cryptocurrencies for their purposes. The regulatory framework of the European Union has also aroused interest in BTC as a potential value shop.
* Mercato feeling: conversations on Twitter and online forums are full of bullish feeling against Bitcoin, led by the recent increase in prices.
Conclusion
The conduct of fundamental analyzes for cryptographic investments requires attention to details and an understanding of the underlying factors that guide cryptocurrency prices. By evaluating the dynamics of offer and supply, by analyzing the technical indicators, evaluating the regulatory environments and examining the feeling of the market, investors can obtain a deeper understanding of the cryptocurrencies chosen and make informed investment decisions.