The year 2018 has only just begun, and you already have a good amount of money at your disposal to invest in the financial market? Investing in cryptocurrencies can be a good option, as they currently make up a total of $600 billion in the market. And the market value is still rising, some would say inevitably so, and has been predicted to grow to $700 billion in the coming months.
However, the price movements of top cryptocurrencies are very erratic due to their volatility. Using simple, linear methods to perform forecasts for crypto trading is equal to underestimating their potential, as their figures are prone to sudden jumps. Typically, stock traders rely on moving averages in order to estimate the future prices of cryptocurrency.
However, moving averages are not constant and suffer from some pitfalls. Mainly, the perpetual and extreme fluctuation of crypto prices makes moving averages a poor estimator of the market.
The volatility of crypto markets is well beyond existing conventional markets. To give an illustration, we can take a look at the value of Bitcoin in the last few months: It has been completely inconsistent and has increased its value at least five times with an uneven pace. The data on Bitcoin exchanges can help you maintain a record of current trends and performance of trading cryptocurrencies. Mainly, this data helps you devise a robust strategy to remain in the mainstream of cryptocurrency market.
Where to Start?
Since variability and ambiguity of cryptocurrency are inevitable factors, it is very important to perform a risk analysis before you make the decision to invest any of your money. As part of this analysis, running simulations can help us in trying to predict the price values of cryptocurrency in the future. Monte Carlo simulation (MCS) is a model designed to assist people to make price predictions. MCS can help us accomplish our goals and keep a track of cryptocurrencies. Specifically, it can:
- Calculate daily returns
- Specify the daily return range
- Simulates summary statistics
- Analyze the prices
Can Bitcoin, Ethereum, and Ripple Regain Their Previous Value?
Expert Roundup for Bitcoin Price Prediction
Bitcoin saw a conspicuous price fluctuation in the past few months. This has heightened the concerns of investors with regard to price predictions for the coming months. Bitcoin plunged 30% in November last year before it rebounded and reached $10,000 dollars. This current state is enough to fuel anxiety among experienced and new investors. However, according to the Bitcoin Price index (BPI), its value has reached a peak of up to $11,279.18 in February 2018. Consequently, experts predict a continuous increase in Bitcoin prices. However, the fact remains that cryptocurrency prices are not consistent and cannot be relied on for stable earnings, the market will certainly remain highly volatile and speculative in 2018.
Supply And Demand as Price Predictor
For some stock analysts, it is important to examine existing factors of supply and demand to forecast cryptocurrency prices. The founder of LDJ Capital, David Drake, has predicted Bitcoin prices to increase up to $20,000, basing his analysis on the limited supply of Bitcoins. Overall, prices are likely to increase from $ 11,000 to $14,000 in 2018.
Expert Roundup for Ethereum Price Prediction
Despite some dramatic falls in Ethereum prices in the last two months, investors are expecting an optimal future to invest in cryptocurrency trading with Ethereum. According to a recently conducted survey, Ethereum prices will likely increase in 2018 with a growing market capitalization. It is further predicted that the currency increase will be up to 212% and approach the gold standard of cryptocurrency trading. With an expected price of $2,550 will, however, remain on its position as the third largest cryptocurrency.
Ripple – The Next Big Cryptocurrency?
Crypto experts claim Ripple as a catalyst in this new era of digital currency. The currency has faster transactions and lower fees, which make it easier for various financial systems and investors to embrace. The current value of Ripple is $3.8 and this value has been fluctuating since the beginning of 2018. However, a number of countries have recently banned cryptocurrencies altogether, making it harder for new player to establish themselves, so it’s hard to predict whether Ripple will increase in the current year.