Forecast the cryptocurrency market trend with data extraction

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4 min read

Cryptocurrencies have emerged as the new safe-haven asset for businesses. However, fear of rising inflation due to the global pandemic has led people to hold less cash and remain hedged against the market swing. 

Many businesses have started accepting payments in cryptocurrencies. According to a 2020 Deloitte report, over 2,300 US businesses accept bitcoin for various investment, operational, and transactional purposes. 

Recently, there has been a trend among the corporate sectors to convert their cash assets into cryptocurrencies. As a result, the confidence of corporate giants has increased the value of crypto coins.

Cryptocurrencies, as the currency of the future, are notorious for their extreme volatility. So, it’s essential to keep an eye on the market trend to make profitable investments. 

Cryptocurrency trading is highly reliant on data. Companies can make data-driven investments by looking at historical prices and the factors which would affect cryptocurrency growth in the future. 

Cryptocurrency market data can be collected and transformed into structured value in real-time using data extraction tools. The extracted data can provide traders a reliable basis for making investments in the flourishing crypto markets.

What is Cryptocurrency?

The global economic crisis of 2008 paved the way for cryptocurrency. A cryptocurrency is a type of digital currency accepted worldwide and can be used to buy goods or services. Also, people trade cryptocurrencies for profit, with investors occasionally driving up prices. Unlike credit cards, cryptocurrencies use an online ledger and strong cryptography to secure and manage online transactions.

The peer-to-peer transaction model in cryptocurrencies eliminates the need for any third parties, reducing the transactional costs involved. 

For instance, any transaction between the US and Indian traders demands banks and government agencies’ involvement to convert money from dollars to rupees and vice versa. On the other hand, bitcoin allows traders to conduct direct financial transactions worldwide without any third-party intervention.

Cryptocurrency- A volatile business

Cryptocurrency has become a global phenomenon. More than 5000 altcoins, such as Ethereum, Litecoin, Stellar, and others, are soaring high in the crypto market. 

However, the cryptocurrency market has been incredibly volatile, with rapid gains and losses, for a decade. Multiple factors, including the macroeconomic environment and government regulations, impact the growth of the cryptocurrency market. 

At the moment, the thriving crypto market has dropped by 30% as a result of Elon Musk’s tweet about not accepting bitcoin payments and China’s cryptocurrency ban. This latest bloodbath has prompted cryptocurrency newcomers to reconsider their bitcoin investments. 

Although, Chaddy Kirbaj, vice director at Swissquote Bank in Dubai, disagreed by saying that “Bitcoin fell from nearly $20,000 in December 2017 to $4,000 by March 2020 before rallying, and this time will be no exception.” 

Organizations can make critical decisions to invest in this highly fluctuating crypto market by monitoring the past and current trends. Also, the market crash of cryptocurrencies does not mean that companies should shun it altogether. Instead, proper cryptocurrency data analysis is needed to interpret the future costs and survive in the crypto market.

Data extraction and cryptocurrency 

The cryptocurrency market involves a vast amount of public data. A minor glitch in the analysis of the data would result in stale investments and bankruptcy. Therefore, it is essential to have an eagle view of the market trends, global economy,  trading patterns, and pricing patterns of various currencies. 

To become a pro player in the crypto trade, a thorough analysis of the crypto market is essential;  this is where the data comes into play.

Manually collecting and analyzing these factors would cost the organization time and money. Here, data extraction tools can aid in collecting cryptocurrency data from multiple sources and transforming the unstructured data into values suitable for risk analysis.

It is essential to know the underlying factors for the rise or fall in the crypto market.  Automated data extraction and analysis helps you to gain insights into the reasons behind the crypto market fluctuations.

How does data extraction help in cryptocurrency trading?

Traders are becoming more aware of the expanding opportunities in the thriving crypto markets.  It is essential to examine previous trends and make calculated investments to survive in the volatile crypto market, 

Here’s how you can stay updated: 

Follow government policies

Many countries have outlawed cryptocurrency, and others have stated that they are considering doing so. A sudden ban of cryptocurrency from any country would lead to investor distrust and a drop in the cryptocurrency price. Therefore, it is vital to keep track of government policies. Data extraction and analysis tools automate the process of analyzing government policies and bills, enabling the organization to invest in legitimate currency.

Monitor companies that accept cryptocurrencies

Companies accepting cryptocurrency payment generally pushes pricing upwards. According to a Forbes article, the value of the cryptocurrency increased by 700% in the last year because of Elon Musk’s tweets about accepting payment for its cars in bitcoin. Furthermore, many prominent players, such as PayPal and JPMorgan, have continued to support bitcoins, which has increased the acceptance rate and value of cryptocurrencies.

Tracking all of this data provides an in-depth understanding of the general acceptance rate of each cryptocurrency. An automated data extraction tool can quickly gather data about all the companies accepting bitcoins and their impact on the price. The data extraction process assist you in making profitable sales when there is a substantial market trend for the currency.

Track key cryptocurrency price 

Ethereum and Bitcoin dominate the majority of the cryptocurrency market. However, there are currently over 1000 cryptocurrencies in existence. Monitoring the general trends in all of these currencies manually is a time-consuming and error-prone process. 

An automated data extraction tool can gather data from multiple sources to track the potential currency in the market. The data extraction process can reduce your workload while providing the highest possible return on the data collected.

Conclusion

Crypto markets are incredibly volatile, and cryptocurrency trading would be difficult without a thorough understanding of the currency’s market demand and the global economic condition. 

So, proper risk analysis of the cryptocurrency is required to boost your profit margin and make successful investments. However, identifying the global trend, keeping track of government policies, and monitoring the currency’s price can be tedious.

At Xtract.io, with our unstructured data extraction tool, you can make profitable investments and limit the damage during a financial downtrend.

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