Crypto Academy Week 10 - Homework Post for [@stream4u]

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I am @jahid1971. I am submitting my homework given by @stream4u.Thanks to him for his wonderful lecture. So, Let's get started:

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Question: What Is Price Forecasting?

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Price Forecasting is the way in which the future value of a crypto asset is predicted using a number of factors and formulas. Through this process, we can estimate the value of crypto assets in the future. This prediction is based on the past value of our assets that have been going on for days, hours, weeks, or months. Forecasts tell us that we need to sell our assets or buy our assets in the future. Basically, a price forecast is a strategy or decision that helps us to trade our assets according to future price forecasts. In the method of price prediction decision, we use different formulas and techniques to predict future prices based on past and present asset prices. The most important factor in predicting assets is the behavior of the assets. It plays a key role in stabilizing or taking the value of your assets.

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Question: Discuss why Price Forecasting is needed?

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We all know that cryptocurrencies are very volatile because they do not have a stable price, so to deal with the price of the cryptocurrency that you have to invest or transact, otherwise, you will regret your decision after investing or trading. Again, the forecast will tell you about the upcoming high or low or uptrend or downtrend, and if you know that in advance you can easily deal with it by raising capital or trading at a high price or holding or low price. If you have knowledge of future predictions, you can be prepared for them, you are ready to buy more holdings and you are preparing for it before the downtrend comes so it makes you faster than others who do not know the current trends.

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Question: What Methods are best you feel for Price Prediction/Forecasting.

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Price Prediction/Forecasting can be done in these three methods:

Technical Analysis: In the technical analysis, traders or investors basically use chart activities, candlesticks, trend lines, check the structure of the previous chart, and check where it is breaking or re-testing. They also check the bearish and bullish trends, where resistance and support, price movements, and all were to get a firm and accurate forecast.

Fundamental Analysis: In the fundamental analysis, current market trends and price charts are totally ignored. In this method, The investor/trader does not need a moving average or price chart to forecast the price. He will evaluate the financial statements of the company, performance of the company, management system, new projects that are launched, market supply of the currency, reputation of the company, etc. Usually, an investor will invest after the projects have a huge potential for growth.

Sentimental Analysis: In the sentimental analysis, an investor examines the market on the basis of news, media, and other discussions. This sort of news creates a panic situation and the traders try to exploit this sort of situation. There remains very instability involved in such situations and its effects can be both negative or positive. In this situation, the market moves very fast, and traders can earn or lose in a very short time.

Now if we discuss which method is best, I think all are equal on different aspects. Some say technical analysis, some say fundamental analysis, but I think they are equally important in different conditions. Technical analysis is best for short-term investors, fundamental analysis is best for mid/long-term investors and sentimental analysis has an impact on both short and mid/long-term trading too.

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Question: Take any Crypto Assets Chart graph & as per its current price tell us what will be its future price for next 1 week?

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Now, the market is very much risky. So I want to discuss a coin that has no technical and fundamental potential I think. This is the chart of Dogecoin. Its current price is now around $0.27. Currently Its the most hyped coin in the market. Though the coin has not technically great potential, the coin shows a shocking growth when Elon Mask posts a tweet about this coin. It has seen that when Doge gets positive impacts, it shows around 300% pump in the market. Usually, the coin gets positive news from Elon Mask in 10-12 days intervals. Elon Musk tweeted on Dogecoin on 16 April last, so as per calculation, the Dogecoin can rise again on 26th-28th April. The price of the coin can reach $0.50 - $0.75. I wouldn't be astonished if it reaches $1.

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Conclusion

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Every trader/investor should have knowledge of prize forecasting. It does not guarantee the future but it helps us to predict what may happen in the future.