Homework Task-Steemit Crypto Academy | Week 10 | Course By @stream4u

In cryptocurrrency trading, every trader seeks to make income, so he or she tries to know the market well enough and be able to predict; to some degree the market behavior before investing his or her money and time in it.

What then is price forcasting ?

Price forcasting is the use of all the trading parameters or data like the volume of transaction , the range -highs and lows- ,etc , to predict the future performance of a particular coin or a group of coins .This process is a very tasking one . Price forecasting in simpler term is what an investor does so as to avoid avoidable losses in cryptocurrrency trading. lots of data needs to be analysed for forecasting to be achieved and most times expertise may be lacking .

Why is price forcasting needed ?

The cryptocurrency world is one that is very volatile , that is, you can loose so much if a proper analysis is lacking and that is where price forcasting comes in. Price forecasting helps to bring in a certain level of certainty in the uncertain world of virtual currency.

A proper forcasting should be able to tell the possible Price of a particular coin at a given time interval , say a week or month. Price forcasting helps the trader to be able to have the confidence to invest in a particular coin even though he knows there is a chance he may still loose. Price forcasting takes a look at the overall adoption and viability of that coin in the real world, like what bussuness are planning to adopt the coin for bussuness and the level of satisfaction of investor with the coin .

All these things must be considered when analysing the market.

What methods are best for cryptocurrrency price prediction?

1. Technical analysis: This is one of the best method of analysis . Technical analysis is a method of predicting the future price of a coin by taking into account all the known details available on the coin. Tis method does not spare any detail as things like trade volume , price ranges , highs and lows , opening and closing prices are all considered . For instance if Oslo is planning on initiating a trade, he opens his exchange , Binance for example, and goes through the candle charts to observe the overall trend and how factors like, trade volume , highs and lows ,closing and opening prices fluctuate over time and even check if any real life happenings necessitated those fluctuations before he insvests in other for him to play safe ; at least to some level.Technical analysis,though difficultcult , is the most widely used and reliable method of price prediction because it gives a day to day ;even a lesser time interval , about the performance of the coin.

1. Fundamental analysis: This method focuses on the use of real life trends and developments to predict the viability of a particular coin or cryptocurrency. It takes a look at whether the coin is widely used or has the tendency to be widely used and consequently of high demand in the foreseeable future. Ethereum increased sharply In value after the huge investment of Elon musk In the cryptocurrency .

A wide cryptocurrency trader who foresaw that deal and quickly bought more units of the ethereum would have gotten a lot of profit .A lot of external happenings can actually affect the demand of a particular coin like a pandemic ; like the current Covid-19 pandemic , and adoptions like the acceptance of Bitcoin for the purchase of Tesla cars , and so on.

1. Sentimental analysis: This is the analysis based of what we were told , and it is not usually backed up with research . Sentimental analysis can arise from what a business man said, or just anyone , during a discussion . It can also be a feeling or hunch about the possible behavior of a particular coin at a particular time.

Price Chart Of A Crypto Prediction

Now let us consider a practical example and try to predict ,in basic terms, the performance of Bitcoin(BTC) with a current price of about $74, 411.71( during the time of writing this report) in the next week. The market has been bullish for some weeks already ,although with some setbacks ; which is not surprising .

If I were to buy some units , I would buy some at the point where there was a bearish ( or underperformance ) as the price will be cheaper and then sell later to make some profits . The method I will employ here is the Fundamental analysis method . The Bitcoin is the biggest crypto currency in terms of market cap and it has a very wide range of applications because the level of trust and investor confidence is second to none. Also judging from the candle charts , there has been a constant demand for the coin and stable trend line is also great. So I can buy some Bitcoin and expect to make some cool profit within the next few weeks.

@stream4u