Technical analysis and fundamental analysis are two different ways of looking at cryptocurrencies. Technical analysis is like trying to predict the weather đŠïž. People use it to look at how the price of a cryptocurrency has changed over time and try to guess what might happen next. They look at charts and graphs đ to try and figure out patterns, kind of like solving a puzzle đ. Some popular technical analysis tools include:
Moving Average Convergence Divergence (MACD)
Relative Strength Index (RSI) and
Bollinger Bands
On the other hand, fundamental analysis is like being a detective đ. People use it to try and figure out how much a cryptocurrency is really worth. They look at things like how many people are using it, what the rules are, and how good the technology is. Fundamental analysts follow some rules to determine if a cryptocurrency is overvalued or undervalued1.
For example, if it is a Binance Smart Chain application, users should check the BSC scan to see the transaction history and other relevant information. They can also check the projectâs social media platforms to learn about their activities and community engagement. By gathering and analyzing this information, fundamental analysts can make informed decisions about the value of a cryptocurrency.