Understanding the three forms of crypto analysis

I wanted to create this thread mainly for newcomers who are diving into crypto, so they can understand the three main types of analysis out there. First up, we've got three types of cryptocurrency analysis: 1. Fundamental analysis. 2. Technical analysis. 3. On-chain analysis. Fundamental analysis: this is all about digging deep into the available information regarding a cryptocurrency. It’s a way to evaluate a coin's potential by looking at various aspects. It combines both financial metrics and qualitative measures to figure out the real value of a cryptocurrency. When you compare that fundamental value with the market price, you can see if the coin is undervalued or overvalued. If it’s undervalued, that could be a great buying opportunity. Conversely, if it’s overvalued, it might be a good time to cash out. Fundamental analysis isn’t just for investors; traders also use it to make informed trade decisions. Some key points to keep in mind for fundamental analysis: - Market cap. - Tokenomics. - Total value locked. - Roadmap. - Team members. - Community size and engagement. - Network growth rate. - Adoption rate. - White paper. - Use case. Technical analysis: this one focuses on the past price movements of a cryptocurrency to predict where the market might go next whether it's heading up, down, or moving sideways. Technical analysis relies on various statistical indicators and patterns to assess the likelihood of future price movements.

Focus on fundamentals is best because if a company has good fundamentals, it has good value inside. If you fall into technical analysis or on-chain analysis, you are chasing tails of those companies and their already happened actions while intrinsic value might be nearly zero. Another risk is all analyses have high chance of inaccuracy and if you are too confident on any of your analysis that is either technical or on-chain, you might make terrible decision while ignoring all basic preventive methods that can help you defending your capital so well and efficiently. After doing your research on fundamentals of a company, project, you can move on with good insight on its possible value and make your investment decision. Let's say fundamental analysis is for investment and investor, not for traders.

Of the three analysis, try to understand them very well and know how to trade, speculate the market and get the basics of how to be a trader, because this will help you well when you're bale to combine them all in making your research about the market performance and what to expect, because it will get to a certain stage, whereby we must only have to consider on all other analysis to be able to arrived at something meaningful concerning the market.

each of this analysis is valuable on their own but when you combine all of them together it becomes more powerful for you as trader or as an investor to carry out research on market performance before placing a trade or before investing in an asset. Though investors don't really need to carry out technical and on-chain analysis before they can invest in an asset, those analysis are mainly for traders but it's also important for an investor to know technical and on-chain analysis.

Each analysis has its strengths and weaknesses, we can form a more complete perspective on market conditions if knowing that. Trading is not just about data, but also about market behavior and managing risk. So, keep practicing, be disciplined in research, and don't forget the market is also influenced by external factors that often cannot be predicted from charts or financial reports, and what makes the difference between traders is the ability to read signals from the indicators. If someone only know the theory but can't understand market movements, I think this will be useless too.

He is talking about cryptocurrency analysis and you are talking about company. If you want to do a fundamental analysis on ETH, according to you then you should do a fundamental analysis on the ETH foundation. That does not make sense. Different kind of analysis takes into account external factors, so that is not really a counter argument. A proper analysis includes internal and external elements, so it does factor in all of this.

Fundamental analysis tends to be used as the main reference by investors in making investment decisions into certain assets, because the main goal is for the long term, so it must be able to ensure that the invested assets have great potential in the future. In contrast, technical analysis tends to be used only by traders, the main goal is to find short-term profits, so whatever assets have the potential to rise, even if it only rises for a short time, it is likely that traders will buy it, one example is meme coin.

Knowledge of the three can greatly improve the chances of your success in trading by improving the chances of you being more accurate in your predictions and analysis. If you are a trader who is new and plans on being successful, neglecting any of the three forms of analysis can reduce your efficiency and accuracy greatly. They are all important. You do not need to be a master of the three but knowledge of the three of them would help.

In the crypto trading world, I think the common one that is being used is the technical analysis but if we can add more in our basket why not right? As that can only give us more benefits. And if ever we can add more, for sure Fundamental analysis is going to be the next one on the list, because I never or rarely heard of that On-chain analysis. But based on its name, it must be related to the transactions, am I right? Though indeed that transactions can also dictate if what will be the price of the coin or the flow of the market. It is just that I think many transactions can occur quickly even before we can react. Maybe that is the reason on why it is being preferred less by the people.

I usually check the fundamentals and that's how I analyze the market. While for technicals, there are many ways of doing it but I'm not good at it to admit. And that's why doing fundamental analysis, this is way comfortable to me but I wouldn't say it as something easy to do. But then, whichever type of analysis works for any of us, we should stay on it or even just the holding. It might not be a type of analysis but it's a type of investing strategy that works for the most of us. It's never been easy as well but it has made a lot of people richer.

I believe there would be no need of such on-chain analysis because this is definitely belonging to fundamental analysis. You may coin any new name by separating anything from fundamental analysis but I am stating what I feel about your these three types of analysis. Bitcoin or any cryptocurrency is not a new thing with respect to trading perspective hence there could be only 2 type of analyses are possible basically. I mean no innovation is going to be applied in the name of on-chain which is already a part of fundamental analysis. How many total circulating coins and how many coins are on dormant wallet kind of things definitely influence the price of a coin fundamentally and not day to day basis. So, for trading point of view, I am not sure how those on-chain related things will help an active trader.

These three types of analysis are common to traders but your main focus for beginners I appreciate it and you have explained it very well. Another important thing is risk management and emotional management even though you have understood these three types of analysis very well if not accompanied by the two things I mentioned your trading can continue to lose. Risk and emotional management are other pillars for success in trading.

It seems that the on-chain analysis is a bit complicated. I never tried this analysis before, but I think banks and big institutions have a good source of data for on-chain analysis because I believe these data came from paid subscriptions. I can't afford a subscription since I am just a retail trader. I mainly do technical analysis and a bit of fundamentals. For me, it's enough to be a profitable trader; even a slow gain is fine for me.

It is harder to manipulate on-chain indicators and it takes more time for such on-chain manipulations, however it is still possible. Therefore, on-chain analysis is still possible inaccurate, not only because your bad analytical work, but also because of on-chain manipulations behind the scene from market makers. Looking in long-term growth, and only focusing on a strong cryptocurrency like Bitcoin, can help us having more comfortable adventure in this market, while it increases our chances of getting profit. With Bitcoin, it's simple: "If you can HODL your bitcoin, for some years like 5 years+, you will get profit". For a shorter holding time, be more careful with your financial and investment capital management, including emergency fund, because you can have temporary loss. https://hodl.camp/

Fundamental analysis - Basically for people who believe in long term and influence by major trends or events. Looking at the big picture. Technical analysis - Mostly used by tradera, influenced by charts and indicators. Not using events but rely on chart and its pattern for potential market movement. Onchain analysis - These are the users prefer onchain footprint than charts and green and red lines. Once they saw some good movement onchain they based their decision on these movements. Actually I prefer this over the one on TA.

Exactly some of these on-chain analysis are hidden because most of the platforms tracking certain chains usually do not give out such information easily, plus with technical analysis you can actually get a glimpse of information on onchain in terms of volume buy and volume sells. Personally I feel with the technical analysis and the fundamentals a trader can get a good or comprehensive confluence and still make profits, most traders usually use only the technical analysis but we all know the market can swing or change sentiment with some fundamentals, that’s why it is great to actually check the fundamentals to have a good set up. Another analysis needed again is the sentimental analysis, although this looks like the fundamental analysis but it has to do with the market emotions, social media news and we all know of recent how this has easily change the market sentiment in a very short term compared to fundamentals which is based on the product value and how it is a long term trend. For a trader mostly daily traders sentimental analysis is another tool for a very good trade

On-chain data of public ledger like Bitcoin is for everyone but not all people are able to use on-chain data and have enough necessary skills for on-chain analysis. There are websites and companies with on-chain analysis but "there is no free lunch" and those companies only give some limited reports, summary or basic on-chain data, chart publicly. For advanced ones, they only provide to their Premium users and not all people can access such information. On-chain analysis works for good projects like Bitcoin and if you are looking into a shitcoin, on-chain analysis is mostly useless. They are centralized projects and can be manipulated easily so things can change very quicky by founders, though on-chain analysis can help you to realize shit coins and avoid them at beginning.

I think it's great that all three analysis types are included. Fundamental and technical analysis are common, but many forget how useful on-chain data can be too. Using all three together gives a fuller view of the crypto market - real trader can relate.

Running program to fetch data on-chain at such large scale is expensive I guess, something like DUNE can do this but their query is expensive so I never tried to use on-chain data as part of analysis. Maybe subscription to those on-chain analytics provider makes more sense. In regard of your views about shitcoin, I agreed , they are as unreliable as the project itself, too much botted transactions which means waste of time, won't even reflect anything anyway.

I think its a nonsense inclusion. First two are purely for trading last one has nothing to do with trading and usually just compliance and banking style tracing. It not gonna help you as a crypto trader to relate more. I mean if we want to make random lists we might as well say 10 types of analysis if you want to add whitepaper analysis, adoption analysis, usage analysis, miner analysis on a blockchain right?