Can artificial intelligence forecast Bitcoin fluctuations?

2017 was a shining year for Bitcoin when its price skyrocketed to almost $20,000. But since then, it has not been able to reach that magic figure again. Experts agree that the market hasn’t been too kind to improve its condition. Keeping the volatility in mind, investors fear that their investment may not hold worth if Bitcoin values go down in the next few years. But there is no guarantee that because the price is low now, it will remain the same or fall below par in the future. That is why investors resort to technical trading indicators to predict and understand the future movement of Bitcoin.

AI and trading indicators

It is hard to determine the exact factors that drive Bitcoin fluctuations, but if you are not concerned about the causes and only want to focus on the consequences, it is high time you start using the trading indicators. These indicators feed on artificial intelligence, and they provide an average price of Bitcoin for a specific period.

The concept used by the trading indicators to predict Bitcoin fluctuation is pretty simple. They use moving averages by leveraging the price of Bitcoin for a period like 50 days or 100 days. So, if Bitcoin’s price falls tomorrow or goes above its average price for the last 50 or 100 days, investors can expect an upward or downward fluctuation in the next few days. Depending on whether the average price is below the current price, the indicator will predict what the future holds for Bitcoin. Many investors believe in crosschecking the details before putting their money. They go through different cryptocurrency trading indicators for more info about the average Bitcoin price and whether the predictions are true.

Using AI as a predictor

Taking the data from 2011 to 2018, a private organisation created an artificial intelligence predictor with three combinations: 200-day buy and sell signal, 50-day buy and sell signal, and returns. This was an initiative to check if the stock market volatility impacted Bitcoin movements. The result was astounding as the indicator predicted Bitcoin’s daily price change almost accurately. It was later found that the AI predictor was learning from the data patterns, and that was crucial to provide the prediction.

So, the trading indicators follow a formula keeping in mind the movement pattern of Bitcoin to predict future fluctuations. It is constantly testing the patterns so that it can produce results close to the actual figure. The combination of neural networks and Bitcoin technical analysis is something that is allowing investors to stay put to their decision of continuing to use Bitcoin as the primary cryptocurrency.

Experts are still trying to come up with more accurate information from trading indicators by tweaking their algorithms. But, if a new investor arrives in this industry, he/she can use the existing indicators to get an idea about how the market works and what impact it has on Bitcoins. If volatility is a drawback for Bitcoin, there is definitely a way to bypass this limitation successfully using the trading indicators.

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The financial information is not advice and should not be treated as such.