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How To Start Learning Crypto Market Analytics?

22 December 2021 09:00, UTC
Frank Hamilton

Crypto market analytics can be very useful for investors and traders who want to start working with cryptocurrencies. Here’s what you should know about crypto market analytics and how you can start learning it.

What Is Crypto Market Analytics?

To put it simply, cryptocurrency market analysis or crypto market analytics is all about studying the crypto market and the latest industry trends and news to get a better understanding of how you should go on with your trading or investment strategy. Market analysis usually includes everything from cryptocurrency reviews, analytics of the latest news, overviews of new players, discussions of trading tendencies, and so on.

Why Do You Need to Learn It?

In essence, learning how to analyze the crypto market will help you make smarter decisions, plan your strategy both in the short-term and in the long run, and overall become a better investor and/or trader. Knowing how to analyze the market requires you to develop a set of analytical skills and use one of the two main methods of analysis (technical or fundamental).

Tony Blackwell, an expert from the writing services reviews site Trust My Paper, explains,

“You can’t just rely on what the experts say. Are they even experts? Why should you trust them? It’s always better to make your own decisions when it comes to investing or trading, and the crypto market is no different. You can still listen to what the experts are saying, but your decision to make a particular step needs to be guided by a variety of factors rather than just the words of other players like yourself.”

What Is Technical Analysis?

There are two main approaches to crypto market analytics. The first one is that of technical analysis. The main premise of this type of analysis is that history repeats itself which is why this method mostly relies on historical market data to guide your decisions. You will be looking at past pricing trends, trading volume, and the like rather than looking at the current state of a coin or project.

Technical analysis aims to identify repeating patterns and make calculated predictions about upwards or downwards trends. The main assumption here is that prices are not random and can be predicted if you look at past trends. However, rather than looking at all the possible factors that could influence prices at a particular point in time, you will mostly be focusing on supply and demand.

While technical analysis can be quite useful and effective if done right, it doesn’t always work or always fail. In most cases, the success of technical analytics depends on the person performing the analysis and making the final decision to act in a particular way. That’s why some people favor fundamental analysis over technical analysis.

What Is Fundamental Analysis?

Unlike technical analysis, fundamental analysis aims to look at the bigger picture more. When performing fundamental analysis, you will be looking at both qualitative and quantitative factors that could influence an asset’s intrinsic value. Your actions will then be guided by whether the asset is overvalued or undervalued compared to its current market price.

Fundamental analysis is used both for cryptocurrencies and for other types of trading. But because the crypto market functions differently than other industries (e.g. there are no public financial statements you can check), the approach should also be different. Because there are so many factors to take into account when making predictions through fundamental analysis, it can become quite challenging to perform, especially for beginners.

Oriana Curran, an expert from the custom writing reviews site Supreme Dissertations, says,

“With fundamental analysis, there are so many things to consider. There’s transaction volume, user activity, unique cryptocurrency features, and even some global economic events that could potentially influence the crypto market in a significant way. There are many things to keep in mind and it can be overwhelming.”

Perhaps this is the primary reason why some traders and investors choose to start from technical analysis. It’s simply easier to look at historical trends instead of trying to take into account all kinds of factors. Ultimately, as a beginner, it’s best for you to combine the two methods and to learn to use them both to some extent.

Which Courses Should You Start From?

By far the best way to learn crypto market analytics is through online courses. These are usually fairly affordable and quite comprehensive. Moreover, you can still supplement them with self-studying and free materials you find online. Here are some popular courses you might want to check out:

Final Thoughts

All in all, anyone can become a successful crypto trader or investor. You just need to take the time to learn the basics, then get more advanced knowledge, and start practicing. The more experienced you get, the more you will understand how you want to perform crypto market analytics.