Key Factors in Crypto Fundamental Analysis

1. Technology and Blockchain:

💥Scalability: The ability of the network to handle increasing transactions.

💥Security: The strength of the blockchain against attacks.   

💥Decentralization: The level of control distributed among network participants.   

💥Innovation: The project's ability to introduce new features or applications.   

2.Team and Development:

💥Experience: The team's background and expertise in the crypto industry.   

💥Roadmap: The project's clear development plan and milestones.   

💥Community: The size and engagement of the project's community.   

3.Tokenomics:

💥Supply and Demand: The distribution of tokens and how it affects price.   

💥Utility: The practical use cases of the token within the ecosystem.   

💥Inflation Rate: How the token's supply is managed over time.

4.Market Adoption:

💥User Growth: The number of users and active addresses on the network.

💥Partnerships: Collaborations with businesses and institutions.   

💥Regulatory Environment: The legal and regulatory landscape for the project.

5.Economic Indicators:

💥Market Capitalization: The total value of all circulating tokens.   

💥Trading Volume: The amount of cryptocurrency traded in a specific period.   

💥Price-to-Earnings Ratio (P/E): A valuation metric used in some cryptocurrencies.   

Challenges of Fundamental Analysis in Crypto

💥Volatility: The crypto market is highly volatile, making valuations difficult.   

💥Lack of Standardization: Financial metrics and reporting standards are not as established as in traditional finance.

💥Speculation: Market sentiment often drives prices more than fundamentals.

Another very important part of fundamental analysis is News Events. How ?, you may ask. Well, let's discuss further.

News can significantly impact market sentiment and, consequently, the price of a cryptocurrency. Positive news, such as regulatory approvals, major partnerships, or technological breakthroughs, can drive up demand and price. Conversely, negative news, like security breaches, regulatory crackdowns, or market manipulation scandals, can depress prices.

Examples of News Events Affecting Bitcoin

💥Regulatory Developments: Changes in government policies towards cryptocurrencies can dramatically impact Bitcoin's price. Positive regulations can boost investor confidence, while restrictive measures can lead to price Let's look at some practice examples of this; recently, the united states securities and exchange commission dropped their long-standing legal battle with Ripple(XRP) and as a result, the asset is pumping. Also, yesterday, the president of the United States of America, Donal Trump, tweeted that his government would create a crypto reserve which would include cryptocurrencies like Cardano, Ripple or Xrp, Bitcoin, Ethereum and others, this alone plunged the market into a sharp reversal from the retracted bearish retracement we have been experiencing for weeks now.

💥Market Adoption: News about increased Bitcoin adoption by businesses, institutions, or governments can positively influence its value.

💥Technological Advancements: Breakthroughs in Bitcoin's underlying technology, such as scaling solutions or improved security, can enhance its appeal and potentially increase its price.

💥Market Sentiment: News stories about market trends, investor behavior, and expert opinions can influence overall sentiment towards Bitcoin, affecting its price.

💥It's essential to distinguish between noise and significant news. Many news stories might have little impact on Bitcoin's long-term value. However, major events that fundamentally change the cryptocurrency landscape can have a lasting effect.

Now how do we apply all of these to knowing when Bitcoin has reached peak price or bottom price?

Well, it is simple. If negative news events about Bitcoin keep making the rounds, then, it might be a sign that the price will keep crashing but when positive news events start spreading, then it could increase the confidence of investors which could start a bull run in price