Introduction
There are many different methods to predict the price change for a cryptocurrency. Generally, each method will correctly predict the price change during some unknown time period. No method will always be correct. But if one or more methods agree, this gives more confidence for the price prediction. Three methods to predict the price change for a cryptocurrency are:
- cryptocurrency network transaction data
- social media analysis
- technical analysis of price history
Cryptocurrency network transaction data
One method used to predict the price change for a cryptocurrency is to examine the performance of the cryptocurrency network. Some of the typical variables used are:
- average confirmation time
- block size
- hash rate
Results
- In one analysis to predict the price change in Bitcoin (BTC):
- the direction for the daily price change had a 98.7% accuracy
- the direction for the price change for 10 minutes in the future had a 50%-55% accuracy
- In a second analysis for the direction for the BTC price change for the next hour had a 55% accuracy.
Social media analysis
A second method used to predict the price change for a cryptocurrency examines social media data. The relation is that more bullish posts predicts an increase in price.
Results
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One analysis to predict the price change in BTC examined Twitter. The direction for the price change for 2 hours in the future had a 79% accuracy.
- In a second analysis for the direction for the price BTC change for 10 minutes in the future had a 55% accuracy.
Standard technical analysis
A third method used to predict the price change for a cryptocurrency is technical analysis of price history. Some of the typical variables used are:
- candlestick chart patterns from open, high, low, and close prices
- moving averages and moving average crossovers
- momentum indicators such as RSI, MACD, etc.
Publish0x is full of blog posts for the technical analysis for BTC, ETH, XRP, LTC, etc.
Conclusion
The three most used methods to predict the price change for a cryptocurrency are:
- cryptocurrency network transaction data
- social media analysis
- technical analysis of price history
Generally, each method will correctly predict the price change during some unknown time period. No method will always be correct. But if one or more methods agree, this gives more confidence for the price prediction.
