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Fundamental Analysis in Crypto Trading

Fundamental analysis is the study of fundamental factors that affect the price of an asset. In other words, it’s a technique used to investigate factors to determine whether they are likely to impact the price of an asset in the future.

What is Fundamental Analysis?

Fundamental analysis is the study of economic, financial and other non-quantifiable factors that affect a crypto asset’s price. The most important thing to remember about fundamental analysis is that it’s not just about whether you think something will go up or down in value; rather, but also about why you think so.

One way to do this is by looking at current project metrics and on-chain data and comparing them to previous markets that have similar characteristics as the current market (such as those based on time periods). If there are certain similarities between these markets—like an increase in demand for cryptocurrencies after a new product release or partnership affecting their prices—then these could be used as indicators for what may happen next with your own investment portfolio.

Introduction to Fundamental Analysis in crypto trading

Fundamental analysis is a method of analyzing the financial statements and historical data of a company or crypto asset to determine its intrinsic value (a number that represents what you would be willing to pay for it). This method can be used to determine if a cryptocurrency is undervalued or overvalued based on its intrinsic value.

If you’re new to crypto trading, fundamental analysis may seem intimidating at first because it requires understanding how businesses operate and how they make money. However, once you’ve learned the basics of this process, it will help improve your decision-making skills when planning trades with cryptocurrencies like Bitcoin and Ethereum!

Using fundamental analysis for trades

Fundamental analysis is used to predict the future price of a coin. While on-chain metrics are more accurate than project or financial metrics, they can be difficult to understand and interpret. On-chain Metrics are the most important aspect when it comes to fundamental analysis because they provide insight into what’s going on behind the scenes at a given time.

Project Metrics focuses specifically on the project team, vision, whitepaper, roadmap, backers and community rather than the entire coins themselves. This can be useful if you want to know how much work has been done on a specific project over time so you know how likely it is to succeed in its goal of being launched into production someday soon!

Financial Metrics look at things like capitalization as well as trading volume, these numbers give clues about how popular certain cryptocurrencies will become over time—which could help determine whether or not entering or exiting now makes sense.

Correlation Between Price and Fundamentals

  • Fundamentals are the underlying factors that affect the price of a cryptocurrency.
  • Fundamentals are not just limited to company news and earnings reports.
  • Fundamentals can be used to predict the future price of a cryptocurrency, even if it hasn’t released any new information yet.

Things to note with Fundamental Analysis

Fundamental analysis is a method that uses historical market data to determine the potential of a coin or token. It’s an important tool for traders because it can help them determine if they should invest in a particular project, but it’s also helpful for long-term investors who want to make sure they know what they’re getting into before putting their money down.

As with all types of analysis, fundamental analysis isn’t perfect—it takes time and effort to gather accurate data on a given cryptocurrency. However, when done correctly (and with enough time), fundamental analysis can provide an excellent overview of how much value might be tied up in each coin being analyzed and whether there are any risks involved with investing in them at this point in time.


Fundamental analysis is an important part of your trading strategy. You should know how to use it but also understand its limitations.

If you’re new to the world of crypto trading and want some help getting started, check out our guide on How to start crypto trading!

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