While there are many ways to determine future direction of price, learning the external fundamentals behind price movements may lay the foundation for future success.
Fundamental analysis is an assessment of political, social and economic environment of the market aimed at determining a factor or group of factors which influence the price. This is very different from technical analysis in that the former is based on the assumption that all future price movements are inherently visible in the price chart and that foundation for future movements has already been laid by the historical price fluctuations.
The application of fundamental analysis may differ depending on type of market and its conditions. For example, the Stock market fundamentals are mainly based on analyzing company’s performance and its earnings reports, evaluating quality of company’s assets and potential growth. Currencies on the other hand are driven by external economic factors in both micro and macro spectrum and are less vulnerable to short-term shocks.
When evaluating bitcoin, though, investors are keen to evaluate key aspects of the cryptocurrencies underlying technology, for example, how its scaling challenges might affect the digital currency's value.
In this E-Book we have compiled the most essential concepts of fundamental analysis including those that can be successfully applied in cryptocurrency trading. Trading volume, market capitalization and impact of governmental regulatory policies on price of Bitcoin and other cryptocurrencies – a must read compilation for all those willing to learn and reach success. 13 pages