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Cryptocurrency Guide: The Basics of Crypto Trading Analysis

Cryptocurrency Guide: The Basics of Crypto Trading Analysis

Crypto trading analysis

The cryptocurrency space is one that needs a lot of research or the investor or trader to make a profit. Crypto trading analysis requires in-depth understanding and market analysis. This does not matter whether you are into the day trading or HODLing; you will still need to analyze the market to get the best out of it. The cryptocurrency market is highly volatile, and this is why you cannot afford to trade blindly in the crypto space. There are basically three types of cryptanalysis which enthusiasts and experts tend to rely on while trading:


New trading involves following the news and trends and making a prediction based on them. This trading type is important because 20% of people own 80% of the crypto asset. Hence, the entry or exit of one main investor can make a lot of difference in the market. Individuals who rely on news trading tend to follow different news platforms and make their decisions based on what is going on at that time.

News trading is a little bit difficult to trade with for beginners. This is because information spread can be slow and highly unpredictable. Those who rely on news trading often have inside information, and they must have locked in the position even before the news gets out. Also, this form of trading is best suited for day trading. This is because the recent trending news can be overturned at just any moment, and the price movement can change.


Technical analysis is a type of crypto trading analysis that relies so much on history. This cryptanalysis style believes that nothing is random, and the market follows the patterns of the past action. Hence, the traders who use technical analysis consider the historical market data; that is, the trading volume and past pricing trends of the market. This guides them in making calculated predictions about the coin(s) they want to trade.

Technical analysts identify patterns of repeated behaviors and then try to oppose the trend. For instance, a bullish market will indicate more demand for the coin. High demand will indicate a higher price for the coin. When this happens, people tend to sell their coins to gain profit. Hence, a technical analyst predicts a bearish turn of the bullish market since there will be higher supply when more people sell their coins.


Fundamental analysis is another form of crypto trading analysis, and this is not based on historical data of the coin. Instead, the fundamental analyst focuses on the asset’s intrinsic value. This implies that the analysts predict the turn out of the market based on qualitative and quantitative factors.

Some of the factors being considered in the fundamental analysis are the team’s capability to work behind the asset and the technology the coin is built on. Other factors include the circulating supply, the available supply, and whether or not the coin is minable.
Hence, fundamental crypto analysts base their predictions on the strength of the asset or coin. 

For instance, if an analyst feels a coin is undervalued, they can predict a bullish run of the particular asset because of the numerous real-world applications. On the other hand, if the analyst thinks the price is overvalued, they can predict a price reduction. This price reduction prediction is called shorting.

For instance, Bitcoin’s fundamental analysis might predict a bullish run of the coin in the long run. This is because of certain factors, such as the fixed supply of 21 million and the cross-border payment option. A fundamental analyst will consider other factors related to bitcoin as the BTC halving, which often affects the market price.

News trading has a strong relationship with fundamental analysis as certain sporadic and unannounced factors can also affect the market price. For instance, overnight government regulation of approving or deregulating bitcoin can affect the price. However, it becomes difficult to know which coin has high potential because of this seemingly unpredictable news. Sometimes, however, inside information can go a long way in helping matters. 

This is why fundamental trading might not be the best for beginners, as it involves more careful analysis and in-depth knowledge of the market.


Both technical analysis and fundamental analysis are important for a trader. This is because only one of these analysis options might not give an accurate prediction of the market. For instance, technical analysis is only suitable for day trading or short term trading. It is risky to predict a long-term upward and downward trend using historical data. This is because there can be a massive news change overnight that will change the asset’s course.

On the other hand, the prediction of fundamental analysis is based on the asset’s supposed worth and not just actual market price. Hence, it is best to look beyond the market’s historical statistical data and focus on the asset’s intrinsic value to get the best result.


It is important to note that in-depth market research is important for any of the trading types. Whether you are focusing on news trading or you wish to opt for fundamental or technical analysis, thorough research must be done.

As a beginner in the crypto trading analysis niche, try as much as possible not to take on several assets at once. There are some popular coins apart from Bitcoin, which you can easily study and do in-depth research on. Once you have been able to familiarize yourself with how the market operates, you can then go ahead to consider the seemingly newer coins.

Do not expect to make massive profits at once, especially if you are trading the major coins. However, this does not mean that you cannot make a massive profit as the market volatility encourages it. You can also run into a loss if you do not trade carefully. 

Surprises can spring up in the market, and things might not go the way they are. However, in-depth market analysis and research will go a long way to help curb the potential loss and maintain safe trading during this period. 


I am John Oladokun Opeyemi. Follow me on FacebookTwitter,  Instagram to get access to several updates on Business, Work, Marketing, Freelancing, and How to Build a Reputable/Profitable Brand or Business on the Internet.


John Oladokun Opeyemi is a Content Writer, Social Media Analyst and SEO strategist that loves helping brands and businesses achieve their objective via working digital solutions.

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I am John Oladokun Opeyemi. A Content Writer, Social Media Analyst and SEO Strategist. I love helping brands and businesses achieve their objective via working digital solutions. Welcome to my Space.

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