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Fundamental Trading and Technical Trading: Which one is Better?

Wayne Jones • Apr 11, 2020

When it comes to trading, fundamental trading and technical trading are the primary schools of thought before approaching any market. Although both methods are at opposite ends of the spectrum, they are still used for forecasting and researching future trends in cryptocurrency prices. They also have their advocates and adversaries, just like any investment strategy. Let’s have a more in-depth look at the two.

Fundamental Trading

Fundamental trading is a method that involves evaluating the economic well-being of a country, and by extension, the currency. It is trading on a detailed examination of a crypto’s intrinsic value by looking at the underlying factors which influence the interest of the economy, company, and industry. Some of these factors include growth prospects for the economy, revenues, expenses, and income, the competitive factors the company faces, and the expected return on equity or assets in the industry.

The main idea is to create a quantitative value for the cryptocurrency that would feature in the above factors. Fundamental trading does not rely on trading swings and short term pricing, but it’s a long term investment approach because it may take time to realize the intrinsic value. As this approach looks at future expectations, it builds a valuation based on backward and forward information. 

Fundamental trading can also help a trader predict the future value of the cryptocurrency and to determine if it is overvalued or undervalued. Fundamentalists can discover investment opportunities not yet recognized by the market as a whole and can produce a profitable investment to a trader.

Technical Trading

Technical trading evaluates investments and identifies trading opportunities by analyzing statistical movements gathered from trading activity. Tools used in technical trading focus on scrutinizing the ways supply and demand for a cryptocurrency will affect changes in price, volume, and implied volatility. Technical trading creates short-term trading signals from various charting tools. Also, this approach helps improve the evaluation of a crypto’s strength or weakness relative to the broader market or one of its sectors, which can help a trader improve their overall valuation estimate.

This type of trading attempts to forecast the price movements of literally any cryptocurrency that is generally subject to forces of supply and demand. A trader can then capitalize on pricing opportunities and trends that can be identified in the market activity around each share. However, this approach reflects on being a backward-looking methodology since it is purely based on historical market activity.

Fundamental Trading VS Technical Trading: Key Differences

Fundamental trading examines a cryptocurrency by identifying its intrinsic value for the long term investment. On the other hand, technical trading involves evaluating and forecasting the price of a cryptocurrency in the future, depending on the price movement and volume of transactions. It works best with short-term investments since it uses price charts in the market.

Technical trading uses shorter periods to analyze cryptocurrencies as compared to fundamental trading, which employs more extended periods since investors want to invest in a cryptocurrency whose value will increase in several years.

Technical analysis is concerned with trading, while fundamental analysis focuses on investment. Traders use technical analysis to make short term trades as it gives the best time to enter or exit the market., Most investors use fundamentals to buy or hold cryptocurrencies since it focuses on ascertaining the actual intrinsic value of the cryptocurrency.

Technical trading involves making a decision based on prices and market trends, whereas fundamental trading consists of making decisions based on the information available and statistically evaluated. Therefore, fundamental trading considers both past and present data while technical trading only reviews past data.

Fundamental trading uses financial statements like income statement, balance sheet, cash flow statement, etc. these data calculate ratios and metrics that reflect the crypto’s performance and growth rates. Technical trading, on the other hand, relies on chart patterns , price actions, and technical indicators like moving averages and oscillators calculated from cryptocurrency prices to analyze the future price trends.

Relationship Between Fundamental Trading and Technical Trading

Whether fundamentals drive technicals and vice versa or if strong technical patterns can cause strong fundamentals are among the many dilemmas traders face. Even when fundamental trading is at turning points, technical trading can continue to follow a strong or weak pattern, which might cause them to be out of sync. Besides, a shock to a cryptocurrency can also make technical trading to be out of sync with fundamental trading, either positive or negative.

Technical trading is best for cryptocurrencies in the short run unless there is an unforeseen shock. For example, technical traders can respond to a clash in real-time and don’t have to wait for the next reporting date, so using the charts will result in higher profits. Crypto chart and pattern form using the buying and selling activities which reflect the real-time cryptocurrency behavior.

Also, fundamental trading may lead to long-run profits when the market charts fail initially after a shock by taking advantage of short-term mispricing when the surprise causes the markets to overreact. It may be wise to follow fundamental trading after a collapse because news is temporary and may be positive or negative to a shock’s fundamentals. On the flip side, technical trading may provide the opportunity to take advantage of a correction after the news is delivered. So, both trading approaches should be in sync in the long run.

Closing Thoughts

Technical trading is a tactical, short-term decision-making method that enables traders to build a vision of the market and make the right move at the right time. Fundamental trading should be applied strategically , over more extended periods to help a trader obtain information about the overall state of the market and attractiveness of a specific cryptocurrency.

An investor can get confused in choosing between fundamental and technical trading as an investment strategy, but considering combining both approaches may provide the best opportunity to draw a complete investment picture with the most profits. Both trading approaches can create a confluence of information that should give a better investment than either used alone.

Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. None of the content on Crypto Folds is investment advice nor is it a replacement for advice from a certified financial planner. Please do your own research before purchasing or investing into any cryptocurrency.  

Elevault's $ELVT Token Public Sale Ending Soon, Launch Set for May 15

By Press Release • 13 May, 2024
Elevault Coin is excited to announce that its public sale is active and will be concluding shortly, following a robust and successful presale period. The official launch of this unique token is set for May 15, offering a remarkable opportunity for traders and holders.  This first-of-its-kind token boasts a blend of proven and innovative tokenomics, providing unlimited opportunity and security for a strong and dynamic community that has rallied impressively so far. Elevault Coin's overarching aim is to foster an intentionally designed, exhilarating, and rewarding token ecosystem that will endure through time. Elevault's Public Sale As the enthusiasm for Elevault Coin continues to grow post-presale, investors are still able to engage in this exceptional opportunity as the public sale draws to a close. The project emphasizes inclusivity, offering multiple sales and airdrop events which have already created vibrant community involvement, allowing enthusiasts to actively shape the currency's path forward. Elevault Coin differentiates itself with its innovative approach, having introduced a money-back guarantee during the presale to allow low-risk participation, a feature continuing through the end of the public sale. This public sale is not just an investment; it's a gateway into the future of the project. The Project's Offer for the Web3 Community Exciting features await the Web3 community with Elevault Coin. The project has implemented reflection mechanics to ensure fair distribution of sale fees among all holders and stakeholders. This foundation guarantees that every community member benefits from these fees, independent of their token holdings. Additionally, Elevault Coin incorporates a recurring lottery system where entries can be obtained through trading and token locking, enhancing the coin's appeal for long-term holding. Moreover, the project introduces an NFT "trade license" system that reduces sales fees for traders and opens up further investment opportunities. Designed with deflationary tokenomics, Elevault Coin aims to maintain its value stable with positive price pressure over time. The project also rewards liquidity providers with a designated share of reflections, bolstering its economic framework. Finally, post-launch, Elevault Coin will enhance community control through on-chain governance, building on the input gathered pre-launch and ensuring security and inclusivity through interim controls. This empowers the community to make critical decisions affecting the project's trajectory. About Elevault Coin Elevault Coin is poised to make a significant impact in the cryptocurrency investment world. By rewarding both trading and holding, it redefines the once-static investment landscape. With its unique and thoughtfully designed tokenomics, the coin nurtures a dynamic community, propelling an investment journey not to be missed. With a strong presale and public sale already under its belt, Elevault Coin invites everyone to join its vision of revolutionizing the crypto investment space. For more details, visit the Elevault Coin website and follow its social media channels ( X , Telegram ) to stay updated and participate in the exciting events leading up to the launch on May 15.

Marine Moguls ERC-404 Launches in 11 Days With ~2.9 Million USDT Prizes

By Press Release • 13 May, 2024
In just 11 days, blockchain will witness a revolutionary shift with the Marine Moguls ERC-404 token and NFT launch on May 25, 2024. This isn't just any token and NFT launch; it's a pioneering venture utilizing the fresh ERC-404 protocol, which combines token fungibility with NFT uniqueness. Every NFT has instant liquidity, and every token has fractional NFT ownership, making buying and trading faster and more flexible.  10,000 Tokens and ~2.9 Million USDT in Prizes The collection features 10,000 randomly generated AI marine creature NFTs that can evolve through crafting and merging. As they evolve, they become rarer and more valuable, unlocking lucrative prizes attached to over 25% of the NFT collection, like 100,000 USDT or 50,000 $METFI - 2,588 of the NFTs have prizes. Exclusive Access to MetBot Beta Stake just one $MOGUL token to enjoy generous APY and early and exclusive access to MetBot. This state-of-the-art AI trading bot is a game-changer in crypto trading. Last week, 100% of closed trades were in profit, with an 8% return the week before and an 80% return in two months. MetBot consistently delivers advanced, transparent, automated trading while your funds remain under your full control with instant withdrawals at any time. Token Distribution The distribution of 10,000 Marine Moguls tokens ensures that anyone can get a piece of the Marine Mogul pie: - Airdrop: 3,000 tokens (30%) for the airdrop campaign closing on 24th May 2024, - Whitelist: 3,000 (30%) to MetFi NFT owners, - Staking: 3,900 (39%) for generous APY disbursements, - Liquidity: 100 (1%) for liquidity. Airdrop Campaign Final Call Visit the Marine Moguls website to join the Airdrop campaign before May 24th, 2024, to claim your free $MOGUL tokens and fractional ownership of the Marine Moguls NFT collection. Join the Marine Moguls Revolution We invite you to participate in the groundbreaking Token Generation Event (TGE) on May 25th, 2024. The Marine Moguls ERC-404 collection will make a fun and powerful statement about the future of finance and an opportunity to be at the forefront of blockchain innovation. To secure your place in this transformative airdrop and launch, visit the Marine Moguls website. Don't miss this unique opportunity to dive into a world where crypto meets creativity, utility, and lucrative rewards. Join us, and let's navigate the exciting waters of the future together with Marine Moguls! About Marine Moguls and MetBot by MetFi Marine Moguls and MetBot, powered by MetFi DAO, redefine AI and digital asset integration using the pioneering ERC-404 protocol. This initiative sets a new standard for blockchain utility, merging token fungibility with the unique traits of NFTs for instant 24/7 NFT liquidity and fractional NFT ownership, broadening access and appeal. Alongside, MetBot dramatically enhances the ecosystem's value. As a cutting-edge AI trading bot, MetBot provides Marine Mogul token holders exclusive access to high-frequency trading that has delivered substantial, transparent returns. This AI bot boasts advanced intelligence and adaptive strategies, maximizing profitability while giving users control over their funds every step of the way. Marine Moguls and MetBot embody MetFi's vision of innovation, decentralization, and a valuable and rewarding digital future. By joining the Marine Moguls airdrop, community members lead an evolving ERC-404 ecosystem that challenges traditional concepts of value and ownership, delivering tangible benefits and sophisticated trading solutions. Official Links Website: https://marinemoguls.com Telegram Chat: https://t.me/MetFiChat Telegram News: https://t.me/MetfiNews Discord: https://discord.gg/MetFiDAO YouTube: https://www.youtube.com/@MetFiDAO TikTok: https://www.tiktok.com/@Metfidao.Official Certik: https://skynet.certik.com/projects/metfi Medium: https://medium.com/@MetFi_DAO LinkedIn: https://www.linkedin.com/company/MetfiOfficial GitHub: https://github.com/metfi CoinMarketCap: https://coinmarketcap.com/currencies/metfi2 CoinGecko: https://www.coingecko.com/en/coins/metfi Instagram: https://instagram.com/metfidao

Earn Passive Gold with ShadowGold: The DeFi RWA Token Backed by Physical Gold

By Press Release • 13 May, 2024
ShadowFi is set to launch ShadowGold (SDG), the first DeFi token with a liquidity pool 50% backed by physical gold and 50% by MATIC. This unique composition offers investors stability in volatile markets and sets ShadowGold apart from other DeFi tokens. ShadowGold has already amassed a starting liquidity of approximately $250,000, demonstrating the project's established presence and investor confidence.  ShadowGold is new money for the real world, backed by real gold ShadowGold holders earn passive gold rewards through PAXG reflections on each transaction. The token also grants access to exclusive equity investment opportunities, bridging traditional and decentralized finance. ShadowFi is also developing ShadowPay, the final piece in its ambitious DeFi roadmap, enabling ShadowGold holders to privately spend their gold, making it both an investment vehicle and a practical medium of exchange. Built on the secure, scalable Polygon network, ShadowGold has undergone rigorous auditing by Cyberscope to ensure the highest standards of security and integrity. ShadowFi maintains a strict commitment to user privacy, with no KYC checks, identity verification, or transaction monitoring. The ShadowGold presale kicks off on May 15th at 11PM UTC and will be open for 72 hours. During this time, investors can purchase SDG tokens at reduced prices, beginning at $0.02 and progressively rising to $0.0275 across four stages. Following the presale, ShadowGold will be publicly launched on May 19th, with an initial price set at $0.0357 per token. To participate in the presale or learn more, visit shadowfi.com . About ShadowGold The team behind ShadowGold (SDG) has a proven track record in DeFi since 2021, previously reaching a $45 million market cap and offering the first anonymous debit cards. Now, as ShadowGold, the innovation pivots into Real World Assets (RWA). X (Twitter) | Telegram | Website | YouTube | Whitepaper

Leetah Launches Presale Phase for LEET Tokens Eyeing $5 Million Soft Cap

By Press Release • 09 May, 2024
The Leetah project has officially launched its presale phase for the platform's native token, LEET. The project takes inspiration from the term "Leet" ("elite") and the features of a cheetah in a fun crypto twist. With a 5-phased roadmap, this new meme coin has a serious design that wants to bring value to its community. The ongoing presale phase aims to raise a soft cap of $5 million, a new important milestone for the project.  Leetah's Presale and Engagement Opportunities The project's presale will start at an initial price of $0.0065 for each LEET token. The team plans to leave the presale open until investors buy all allocated tokens. Specifically, with a total supply of 1,337 billion tokens, the presale will allocate 35% of this amount. Another 25% will let the team develop the project through its roadmap. LEET will go live through a decentralized exchange (DEX), for which the team allocated 30% of the token supply. The remaining 20% will cover marketing expenses (10%), airdrops (5%), and affiliates benefits (5%). The project will also feature a "Refer and Earn" program. The initiative will allow participants to earn additional LEET tokens by referring friends and family to the presale. With a 10% reward on their referrals' purchases in USDT, this program incentivizes active promotion and engagement within the community. Multi-Chain Launch Plans Leetah aims to launch on multiple blockchain platforms, including Ethereum, BNB Chain, and Solana. This approach will not only promote accessibility for investors but also set the foundation for potential expansion in the future. The project has already gained traction within select alpha communities with its unique presale strategy and innovative features. Specifically, this project's plans feature five different phases: Phase 1 (or "LeeTah is born") involves launching social channels and the website, followed by the presale phase. Phase 2 ("LeeTah grows") focuses on community building and marketing initiatives while passing a contract audit for security purposes. Phase 3 ("LeeTah roars") will see an increase in marketing efforts and community contests. At this stage, the team also expects to conclude the presale phase. Phase 4 ("LeeTah sprints") will mark the launch of Leetah's NFT collection and its listing on CoinGecko and CoinMarketCap. Finally, Phase 5 ("LeeTah Feeds") will involve the project's listing on major centralized exchanges and the launch of LEET TOOLS. About Leetah Leetah is a project driven by experienced developers to implement and test cutting-edge technologies in blockchain and digital token offerings. The project aims to be a leading name in Web3, pushing boundaries for investors and cryptocurrency enthusiasts worldwide. The ongoing presale phase for its native token, LEET, aims to raise a soft cap of $5 million. Leetah plans to launch on multiple blockchain platforms and has an ambitious roadmap featuring 5 phases of development. With its unique concept and strong team, Leetah wants to leave its mark in the Web3 sector. Anyone curious about Leetah and the LEET token can visit the project's website . The social media pages below frequently share news on Leetah's developments. X (Twitter) | Telegram
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