Cryptocurrencies have seen phenomenal gains this year, and investors want to know which are the best investments. CNBC conducted a comparison between popular coins to help guide your decision.
Since December 2018 LTC has been trading within an ascending parallel channel. If it breaks above or below this range it could determine the next trend.
Sentiment Analysis
Sentiment analysis is a subfield of natural language processing (NLP) that employs computer science, text analytics and computational linguistics to recognize, extract, quantify and study affective states or subjective information in natural language text. Companies often employ sentiment analysis to understand how users react to their products and services and take measures before any issues become more significant.
Following several weeks of bullish momentum, many top cryptos appear to be entering a period of consolidation. Although its future direction remains undetermined, this may either result in pullbacks or new highs; as a precautionary measure it would be wise to wait for confirmation before entering the market.
Technical Analysis
Technical analysis employs charts and mathematical techniques to study historical patterns and trends to predict future prices, commonly used by traders and considered more reliable than fundamental analysis for forecasting future prices.
Recent analyses of cryptocurrency prices include studies that explore their relationships to social media and other online information sources (Wen et al. 2019), while others investigate price behavior determinants like investor attention or herding.
One study employs a dataset containing daily prices for bitcoin, ethereum, and litecoin collected from CoinMarketCap. The models utilized include regression RFs and classification RFs that produce either forecasts of dependent variables (regression) or binary buy/sell signals (classification). According to these models’ results, various factors influence cryptocurrency returns; specifically for bitcoin these include trading volume and attractiveness as key drivers of returns.
Fundamental Analysis
Fundamental analysis refers to the process of evaluating all the factors that contribute to a stock’s price, such as economic conditions, central bank actions and retail consumption patterns. Although most often employed to evaluate share prices, fundamental analysis can also be applied to other asset classes as well.
Changes to interest rates by central banks have an immediate and far-reaching effect, as commercial banks pass along any changes in rates to their customers, creating ripple effects throughout the economy.
Crypto traders can leverage this information to develop trading strategies. Unfortunately, keeping up with all the available data can be challenging and integrating data from various sources can be even harder. That is why keeping an organized trading journal is vital as part of research effort; doing this will allow more consistent decisions and trades to take place.
Trading Strategy
Studies have repeatedly demonstrated the success of model averaging or assembly for forecasting cryptocurrency markets (see, for instance, Catania et al. 2019 and Mallqui and Fernandes 2019). Typically speaking, models considered reliable trading signals when at least four to six individual models from an ensemble agree on tomorrow’s prices or returns (or vice versa).
These models are based on daily exchange prices for bitcoin, ethereum and litecoin and their market capitalization as well as daily high, low trading volumes.
Digital Coin Price predicts that XRP’s value will continue its upward trajectory and reach $5 by 2027, while cryptocurrency experts at Wallet Investor are less optimistic but still believe the price will increase over time – their minimum cost estimate might be around $$3.25, and maximum could reach $4.993. Both predictions are based on numerous indicators.