As traders in cryptocurrency trading what kind of framework of analysis do you prefer best to be taken (as an approach) into consideration when it comes to speculating the future of the market (when to buy and sell), be it on a long term or short term?
Is it with: TECHNICAL ANALYSIS
or
FUNDAMENTAL ANALYSIS.
I'll like to throw some light about the above mentioned analysis for the benefit of those that have a floating or no knowledge about both. So as to accommodate a wide range of opinions.
Now, simply put, Technical Analysts believe that "past price movement can dictate future price movement". Technical Analysts don't try to find out the intrinsic value of an asset, rather, they look at historical trading activity and try to identify opportunities based on that.
On the other hand, Fundamental Analysis is a framework that aims to identify the "true value" of an asset. Analysts here study the economic and financial factors to figure out if the market valuation of an asset is fair, etc.
SOURCE: bit.ly/AcademyEBook2
bit.ly/AcademyEBook1
From the above explanation which could you as a trader possibly go with and why?
Let's discuss.
I think identifying the true value of an asset in Cryptos is pretty difficult not only because generally in stock markets intrinsic value or true value of any asset in stock market is derived using the cash flows which is not the case with crypto markets because no cash flows are really involved here. So I feel best is to try with technical analysis only. I think fundamental analysis is entirely different in Cryptos you study the whitepaper and take knowledge about the project and see how viable it is. But in this you can be successful only if you are into technology.