How to Analyse Crypto Market Trends with Bitsgap’s Analytics Tools

In this article, we’ll explore cryptocurrency analysis, its various methods, practical examples, and recommend essential tools to enhance your trading strategy. Understanding how to analyse crypto market trends is crucial for making informed decisions and maximising your investment potential.

Analysis Cryptocurrency Market: What Is Crypto Analysis?

Analysing the cryptocurrency market involves evaluating various factors and metrics to understand the market trends, predict future movements, and make informed investment or trading decisions. This analysis can be broadly categorised into two main types: fundamental analysis and technical analysis.

Fundamental Analysis

Fundamental analysis focuses on evaluating the intrinsic value of a cryptocurrency by examining underlying factors, including:

• Project Fundamentals: Assessing the project’s goals, roadmap, use case, and the problem it aims to solve.
• Team and Development: Evaluating the expertise, background, and track record of the development team and advisors.
• Technology: Analysing the blockchain technology, consensus mechanism, security features, and scalability solutions.
• Adoption and Community: Examining the level of adoption, active user base, developer activity, and community engagement.
• Partnerships and Integrations: Looking at strategic partnerships, collaborations, and integrations with other platforms or services.
• Regulatory Environment: Understanding the regulatory landscape and potential legal challenges in different jurisdictions.
• Tokenomics: Studying the supply, distribution, inflation rate, and utility of the cryptocurrency token.

Technical Analysis

Technical analysis involves examining historical price charts and trading volumes to identify patterns and predict future price movements. Key components include:

• Price Charts: Analysing candlestick charts, line charts, and bar charts to identify trends and patterns.
• Indicators and Oscillators: Using tools like Moving Averages, Relative Strength Index (RSI), Bollinger Bands, and MACD to gauge market momentum and potential reversal points.
• Support and Resistance Levels: Identifying key price levels where the cryptocurrency tends to find support (buying interest) or resistance (selling pressure).
• Trading Volume: Observing the volume of trades to confirm trends and gauge the strength of price movements.
• Chart Patterns: Recognizing formations such as head and shoulders, triangles, and flags that indicate potential price direction.

Sentiment Analysis

Sentiment analysis uses data from social media, news articles, forums, and other online platforms to gauge the overall sentiment or mood of investors and traders towards a particular cryptocurrency. Tools and methods include:

• Social Media Monitoring: Tracking mentions, discussions, and trends on platforms like Twitter, Reddit, and Telegram.
• News Analysis: Assessing the impact of news articles, announcements, and press releases on market sentiment.
• Market Sentiment Indicators: Utilising tools that aggregate sentiment data to provide a sentiment score or index.

On-Chain Analysis

On-chain analysis involves examining data directly from the blockchain to gain insights into network activity and user behavior. Key metrics include:

• Transaction Volume: The total amount of cryptocurrency transacted over a specific period.
• Active Addresses: The number of unique addresses participating in transactions.
• Network Hashrate: The total computational power securing the network, relevant for proof-of-work blockchains.
• Token Movements: Tracking the flow of tokens between exchanges, wallets, and other entities.

By combining these different types of analysis, investors and traders can develop a comprehensive understanding of the cryptocurrency market, enabling them to make more informed and strategic decisions.

How to Analyse Crypto Market?

To develop a comprehensive understanding of a cryptocurrency, it’s best to combine these different types of analysis outlined above:

1. Start with Fundamental Analysis: Gain a deep understanding of the project’s long-term potential and intrinsic value. This will help you identify promising cryptocurrencies worth further analysis.
2. Apply Technical Analysis: Use technical indicators and chart patterns to identify entry and exit points for trades. Technical analysis is particularly useful for short-term trading and understanding market trends.
3. Incorporate Sentiment Analysis: Monitor market sentiment to anticipate short-term price movements and potential volatility. Pay attention to social media trends, news events, and aggregated sentiment scores.
4. Use On-Chain Analysis: Validate your findings with on-chain data to understand real-time network activity and user behavior. On-chain metrics can provide insights into the health and growth of a cryptocurrency network.

How to Analyse Cryptocurrency with Bitsgap’s Analytics Tools

If you’re looking for a trading platform where you can not only trade cryptocurrencies but also analyse the market, conduct technical analysis, and track your portfolio holdings, then consider using Bitgsap. For starters, Bitsgap is a crypto aggregator and trading platform that connects to more than 15 exchanges and provides a plethora of other tools like automated trading bots, smart orders, crypto simulator, and actionable analytics. 

Bitsgap’s interface also equips you with all the necessary tools for comprehensive technical analysis. Combining Bitsgap’s advanced trading and automation tools with TradingView’s charting features creates a seamless experience. You no longer need to toggle between platforms — you get the best of both worlds in one interface.

First, there’s an exceptional charting interface. Simply navigate to the terminal, click on the [Trading] tab, and you’ll find a robust chart equipped with various indicators, charting, and drawing tools. There are nine different chart types available, ranging from Bars to Heikin Ashi, catering to even the most experienced traders. To add an indicator, click the [ƒx Indicators] icon and search for your desired indicator. If you select multiple indicators, they will appear either stacked at the bottom of the chart or overlaid on the chart itself, as with Bollinger Bands and RSI.

For technical enthusiasts, Bitsgap has developed a unique feature — the Technicals widget, which can be found in the same [Trading] tab at the bottom of the interface, just below the Order book. The Technicals widget aggregates signals from numerous indicators and oscillators. Similar to the Fear and Greed index, it combines and averages signals from popular indicators, making it significantly easier to identify promising trade opportunities. Now, you no longer need to monitor each indicator individually; simply watch for signals from the Technicals widget or click on [More details] below it to examine specific signals. 

Conclusion

In conclusion, analysing crypto market trends involves a variety of methods, each offering unique insights. Fundamental analysis, technical analysis, sentiment analysis, and on-chain analysis are the primary approaches. By integrating these methods, traders can gain a comprehensive understanding of market dynamics and make more informed decisions.

Bitsgap’s trading platform is designed to facilitate this multi-faceted analysis. With its robust charting instruments and the innovative Technicals widget, users can seamlessly combine different analytical techniques. Additionally, Bitsgap offers advanced trading tools such as smart orders and automated trading bots, enhancing the efficiency of your crypto trading strategies. We invite you to explore Bitsgap’s platform and experience firsthand how these tools can help you trade cryptocurrency more effectively.