Fundamental Analysts take into account financial statements and a bunch of standard ratios which give all of us information on the state of affairs of any given investment paper. Then news such as employment numbers, inflation ratios, and new regulations that would or could affect sectors of industry. Some stocks are seasonal, others aren’t. All of these criteria are compiled and crunched into knowledgeable investment recommendations. Buy. Don’t Buy. Hold.
When you seek similar input on cryptocurrency the game changes. Cryptocurrency is intangible with no asset attachment, no collateral, derivative, or government back security. It stands all by itself. Without the needed ingredients to analyze them fundamentally researchers are left with technical analysis.
We have looked into Fibonacci ratios and how they operate within the Technical Analysis of all types of investments, particularly Cryptocurrencies. What I did not mention is the part that ‘ for unknown reasons, Fibonacci ratios seem to play a role in the stock markets, just as they do in nature. Technical traders attempt to use these to determine critical points where an asset’s price momentum is likely to reverse. It’s still an unknown quality.
I personally like the use of the Fibonacci ratios for technical analysis. They flow with the sound of nature. But, when I see and hear analysts making crypto predictions, as if they also had the elements of fundamental analysis, I can’t help but cringe at their attempt to con people into thinking they really know what they are saying. Following the whales (big or institutional buyers), crypto burning which are buybacks that would influence the price fluctuations upwards and maybe another couple of tricks I haven’t yet discovered, the crypto predictability is very flimsy.
I’m having a lot of fun with it because it’s both smart and dumb. Let the games begin.
Learn more about finance terms at Investopedia
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