Greetings everyone,

I much delighted to take part in the second week of the part 2 of crypto academy lesson of our noble professor @stream4u.

This week we have educated on price forecasting or prediction that is how to able to tell the future prices of certain cryptocurrencies. Without wasting much time, I will move ahead to solve this week’s task by our humble professor @stream4u.

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PRICE FORECASTING

Before defining what price forecasting is about, I will like to explain the terms separately.
Price is an amount or unit given to a certain commodity. That is, the value of that particular commodity is been priced accordingly.

Forecasting on the other hand is predicting what is going to happen the next minute or hour or days. That is been able to tell what is going to happen in the new future.

Bring this terms together, we have Price Forecasting to be the process of telling the future price of a particular crypto asset. That is been able to predict whether the price of a particular crypto asset will either rise or fall.

This theory is very useful in the crypto market because it helps investors and traders to make good decisions when making investments be it long term or short term.

Also, it is used to able to find out how the crypto market is moving, whether is good to make investments or not.
The prediction of the price of a crypto asset or commodity is achieved by assessing some components of the asset, which is the behavior, the demand for that asset or commodity and so on.

Some analysis are taken into serious considerations in price forecasting or prediction.

Basically, the asset in which the price is going to predicted is been check as to how it performs in the market.

Technically, the price of the crypto asset is been checked using certain technical tools to see how the price trend is. This will help forecast how the price will be in the near future.

Lastly, the prediction is also carried out by the comments made from other individuals as to how the price was.

WHY PRICE FORECASTING IS NEEDED.

Every investor’s dream is to wake up one day and see that all investments made produces great amount of profits. Even though price forecasting is kind of a guess work, but it helps significantly in the crypto market.

Firstly, it helps puts investors in rightful positions when making decisions as to when and which cryptocurrency to invest in. That is as a result of prediction of a crypto asset it aids investors to know the right period as to when to invest in that particular asset. In a long run there will not be any fear or panic when making decisions.

Secondly, price forecasting is very needful since it improves the chances of investors maximizing their profits rather running into great losses. That is, when the price of a crypto asset is been predicted, it helps investors to put in their wealth so as to make huge profits. This will go in a long run to boost their self confidence in the crypto world.

Last but not least, I will have loved to list more but since I have other questions to solve I will end by adding that price forecasting or prediction not only helping investors but also improves the performance of crypto asset in which the price is been predicted on. In a sense that, when an asset is been predicted most individuals turn to invest more into that particular crypto asset this will help raise the performance of the crypto asset.

BEST METHODS FOR PRICE PREDICTION

Price prediction is a step by step process that is isn’t just done on a sliver Plata. Therefore there are methods that are used in the prediction or forecasting process.
Technical Analysis
In this method the analyst takes into consideration various characteristics of the crypto asset. These involves the how the price of the asset is moving, the behavior of the market, and the pattern of the chart and so on.
This analysis are undertaken using special tools or indicators.
The price of asset in a sense that it is monitored within a period of time as to the previous price and the current price. The behavior is also taken into concrete considerations in terms of the movement be it upward or downwards.
The market behavior is also another analysis in the technical method. That is in this type, the trend of the market is taken into consideration thereby aiding the analyst to predict the price of the asset.

In addition the chart pattern is also another technical method in the price prediction. With this type, the movement of the price of the crypto asset on the chart is used in the determining the future price of it. That is, the analyst will look at how its movement is on the chart in other to determine the next price of it.

Fundamental Analysis
This method does not basically involve the price of the asset but rather the characteristics of the origin of that particular asset. It maybe a group of people coming together to form a team managing that particular crypto asset or a company in charge of it.
The characteristics here are simply the performance of the team or company. That is the analyst checks to see how well they are doing in the crypto world this will be able to aid in the prediction process.

Also the company is checked on the supply made in the market over a period of time and how best their product is doing. That is, is it really improving in positive or negatively?
The profit or loss of the company or team of the asset that is been analyzed on is also checked out. This is also achieved by making comparison to the amount of profit made to that of the loss made also.
Lastly, the outputs of the company is also taken into considerations. That is over the year or within the month what the company has been able to produce in terms of the asset is taken into critical considerations. The whitepaper is also checked to see and compared to the present behavior of the asset.

Sentimental Analysis
This method is usually not book long method in predicting the price. That is, with this method the analyst takes a look at what has been said of the asset in past years so as to predict the future price.

So in this method, concentration is drawn to the views of other people be it the media, news and so on. Some news concerning crypto assets sometimes brings fear to most investors. This news are what is been taken by most analyst to able to predict the prices of such assets in the nearby future.

GIVING PRICE PREDICTION AND ASLO EXPLAINING HOW IT IS DONE USING ETHEREUM

Firstly, I will explain how the price prediction is carried out using a sample graph chart.
There are levels in a graph chart that aids to predict the future movement of that particular asset on the chart.
These are;

1. The Resistance level
2. The Support level.
   The Resistance level in price prediction is the top level of a chart in which the price of a particular asset begins to fall down. That is in this level, when the price begins to decline we classify it as the resistance level. In basic terms it is off resistance.
   For instance the resistance level of Ethereum is at $2,700 before declining. With the second major level been at $2,634.

The Support level on the other hand is down level of a chart in which the price of a particular asset begins to rise. As soon as the price of a crypto asset begins to rise after fall down then we say it is at the support level.
The support level of Ethereum is known to be at $2,430 with the second major been at $2,300.

Below is a graph showing the illustrations of the various levels explained above.

The circle labelled 1 is a resistance level but minor and the one labelled 2 is the major resistance level. The circle labelled 3 on the other hand is the support level.

The graph above is the current price movement of Ethereum from August 2015 to date. With my username @farhmade sketched on it I will like to comment on it.

From the August 2015 through to some number of months the price of Ethereum didn’t rise nor fall but remained static. It was is February 2017it saw its first spike which was less than $500. With that it even dropped a little bit but not to $0 again. In August 2017 that’s two years later from my chart, the price rose more than the initial resistance level but was still less than $500. It dropped again two years later but not to the initial support level either.

Then the first spike of the price of Ethereum was recorded in February 2018, which was more than a $1,000. It can been seen in the yellow ink highlighted in the graph. This price also fell low again after some few months below $500 again. The rise and fall continued until a year later the price went way below the second initial support level. But was able to see a small spike in August 2019.

The trend continued until a tremendous spike was recorded in November 2020 which saw the price mowing to $2,000 plus. Since then the price hasn’t fallen below that range till now. It can be seen by yellow highlighted mark.

In April 2021, that’s some few days ago, the price reached its highest point or major resistance level at an amount of $2,500 plus. The exact figure was mentioned earlier. The peak can be seen with the yellow mark highlighted. The price currently is at $2,434.58 which a proof of screenshot is shown below.

The screenshot was taken at 1:48 am GMT by my phone

From the chart I am predicting the price of Ethereum to go higher than $3,000 in some few days to come looking at how the performance is in the market. That is the demand of it is very high and has the possibility of been tracking down Bitcoin.

CONCLUSION

In a nut shell, I have really learned a lot from this week lesson by our noble professor @stream4u. I can now give some predictions of prices of crypto assets thanks to this lecture. It is my hope that my homework task will be reviewed by our professor. I am also looking forward to learning more.
Thank you for your humble attention.