TradingKey - On March 7, 2025, the White House is scheduled to host its inaugural cryptocurrency summit, featuring a speech by Trump. The market is closely watching how this will impact crypto assets.
David Sacks, the White House's chief of artificial intelligence and cryptocurrency initiatives, will lead the event. Sacks has already teased that this summit will feature “more highlights.”
On the evening of March 2, local time, President Trump announced on a social media platform that a national cryptocurrency strategic reserve would be established. The primary assets covered will be Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Solana (SOL), and ADA.
Many factors influence cryptocurrency price movements.
From both fundamental and technical analysis perspectives, it is clear that understanding a project's "intrinsic genetics" and the market's "emotional code" are equally important.
What is Fundamental Analysis of Cryptocurrencies?
Unlike stock research which focuses on company financial reports, due to the unique decentralized nature and technological framework of cryptocurrencies, fundamental analysis is more akin to a "project health check."
It focuses on four key dimensions: technology, economic model, team, and market demand to assess the intrinsic value of a cryptocurrency.
(Source: Freepik)
What Are the Key Factors in Fundamental Analysis?
Token Economics
Token economics functions as the "economic constitution" of cryptocurrencies, outlining how tokens are issued, and distributed, and how user incentives are structured.
Supply: Is it a fixed total supply (like Bitcoin’s 21 million) or unlimited issuance?
Distribution Mechanism: How much is reserved for the team? How are mining or staking rewards calculated?
Use Cases: Is the token used for transaction fees within the ecosystem, governance voting, or rewarding users? The more specific the use case, the more genuine the demand.
For example, Ethereum's ETH serves as the foundational currency for running smart contracts; its demand is highly inelastic and provides more robust value support.
Development Team
A reliable team is more important than a white paper.
The professional backgrounds, industry experience, and past successful projects of team members are crucial factors in assessing their capabilities.
It's essential to verify whether the project roadmap is being updated on schedule.
Technological Innovation
Cryptocurrencies are fundamentally a technology-driven industry, and projects lacking innovation find it difficult to survive in the long term.
For instance, Solana enhances transaction speed with its "Proof of History" mechanism, achieving over 60,000 TPS—far exceeding Ethereum's 30+. This represents a core competitive advantage.
Market Demand
This can be examined from two aspects:
Are the use cases real?
For example, Chainlink addresses the need for smart contracts to access external data and has become a leader in the "oracle" space. In contrast, some "metaverse coins" lack actual users and are purely speculative.
Is there lively discussion on social media?
Are developers continuously submitting code? For instance, Bitcoin's GitHub repository sees hundreds of code updates every day, which indicates a healthy ecosystem.
(Source: Freepik)
What is the Technical Analysis of Cryptocurrencies?
Having learned how to analyze cryptocurrencies from a fundamental perspective, we now turn to technical analysis.
This involves looking at "price" (price movements), "shape" (pattern formations), and "volume" (trading volume) to predict future trends.
Technical analysis for cryptocurrencies is similar to that for stocks but tends to be more "aggressive"—due to the 24/7 nature of the crypto market, with greater volatility, technical indicators respond more sensitively.
What Are the Key Factors in Technical Analysis?
Price Charts
There are three commonly used types:
Candlestick Chart: Similar to stocks, red bars indicate a decline while green bars indicate an increase. The width of the bars represents the level of buying and selling momentum. For instance, if a long green bar breaks through a prior resistance level, it may signal a significant bullish move.
Line Chart: This connects only closing prices and is useful for observing long-term trends. If the line chart continues upward, it indicates that bulls are in control; if it flattens out, it may suggest a period of consolidation.
Point Chart: This ignores time and records only price movements, making it suitable for capturing critical turning points.
Pattern Recognition
Head and Shoulders: This pattern appears at the end of an upward trend with three peaks—the middle one being the highest (the head), and flanked by two lower peaks (the shoulders). It indicates a potential reversal downward.
Triangle Consolidation: Prices fluctuate between two converging trend lines. A breakout above the upper line signals bullish sentiment, while a breakdown below the lower line signals bearish sentiment—similar to how a tightly compressed spring will have greater rebound force.
Double Bottom (W-Bottom): After two declines to the same price level followed by rebounds that form a “W” shape, this suggests a bottoming out and potential recovery—like someone trying twice to climb out of a pit before succeeding on their third attempt.
Indicators and Tools
Moving Averages (MA): For example, the 50-day and 200-day moving averages. A golden cross (the 50-day crosses above the 200-day) is a bullish signal, while a death cross (the 50-day crosses below the 200-day) is a bearish signal.
Relative Strength Index (RSI): Values above 70 indicate overbought conditions (a significant rise usually leads to a decline), while values below 30 indicate oversold conditions (a significant drop usually leads to an increase).
For instance, if a cryptocurrency's RSI drops to 25, it might present a buying opportunity.
Volume: An increase in trading volume during price rises suggests strong capital movement; conversely, a surge in volume during price declines may indicate panic selling. Be cautious about jumping in during such situations.
You might think this description is too simplistic.
Fundamental Analysis + Technical Analysis: Why Choose One When You Can Have Both?
Technical analysis is valuable but not infallible—sudden regulatory policies or project vulnerabilities can render indicators ineffective.
At such times, fundamental analysis serves as a safety net.
You can begin with fundamental analysis to identify the right direction and filter promising coins.
Next, apply technical analysis to identify the best entry and exit positions.
For instance, if a cryptocurrency has solid fundamentals but technical indicators show "RSI overbought + price hitting resistance," it’s prudent to wait for a pullback before buying to avoid chasing highs.
