From a practical standpoint, anyone eyeing digital assets would benefit from understanding the types of crypto trading and the core ideas that drive each approach. An industry veteran, Su Zhu of Three Arrows Capital, has warned that skipping education in this arena could make the coming century particularly unforgiving for newcomers.
Across global markets, a growing set of investors and traders now apply these toolkits to digital assets. Research grounded in fundamental analysis has been issued by Goldman Sachs, JP Morgan, and Morgan Stanley, while on-chain models such as Stock-to-Flow once projected bitcoin could approach about AU$1.9 million by 2025.
Even though many participants simply hold for the long haul, Tushar Jain of Multicoin Capital has argued that these are the least efficient markets he has seen, which creates room for active management to excel.
With that context, we’ll map out three primary approaches used in cryptocurrency trading—fundamental, technical, and on-chain—and we will begin with the fundamentals.
Table of Contents
- Fundamental Analysis in Crypto
- Technical Analysis for Crypto
- On-Chain Analysis for Crypto
- Blending All Three Approaches for Successful Cryptocurrency Trading
1. Fundamental Analysis in Crypto
Beneath price charts, one discipline compiles all available signals about a coin or token, mixing quantitative financial metrics with qualitative context to approximate intrinsic value. In practice, analysts use this framework to estimate a fair price; within crypto, it is known as fundamental analysis.
By comparing that estimate with the going market price, traders can judge whether a crypto asset appears undervalued or overpriced. Bargains may justify accumulation, while stretched valuations can suggest taking profits.
Take Dogecoin as a meme example. Mark Cuban has argued that DOGE does not possess inherent value in the conventional sense.
Once you apply a structured review, however, the picture becomes clearer. What is Dogecoin in fundamental terms? It lacks typical hallmarks such as a detailed roadmap, an identifiable development team, or even a formal white paper.
Even so, it commands tens of billions in market capitalization, records hundreds of millions in 24-hour trading volume, and enjoys exceptional name recognition among cryptocurrencies. The Dallas Mavericks even accepted it for tickets, demonstrating a use case. Those elements point to some intrinsic value for this digital asset.
Through a valuation lens, one dollar for DOGE might look overheated, whereas five cents could screen as attractive depending on broader conditions and liquidity.
Core inputs for fundamental analysis:
- Market capitalization
- Trading volume
- Tokenomics and supply design
- Total value locked (TVL)
- Development roadmap
- Core team and advisors
- Community scale and engagement
- Network growth rate
- Adoption trajectory
- White paper
- Practical use case
2. Technical Analysis in Cryptocurrency Trading
Instead of studying balance sheets, this playbook inspects previous price movements to infer likely directions—uptrends, downtrends, or ranges. Practitioners pair statistical indicators with chart patterns to weigh probabilities, and visual tools help highlight support and resistance levels that shape entry and exit signals.
Perfection is unnecessary; a win rate near fifty-five percent can still compound well when paired with risk controls. Traders often size positions prudently and place protective orders, such as auto-sell or stop-loss triggers, to manage adverse moves.
As an illustration, examine a bitcoin snapshot from TradingView in late July 2021. The Relative Strength Index (RSI), shown as the purple oscillator, suggested conditions approaching oversold, a setup that can prompt profit-taking and short-term pullbacks in a trading strategy.
Analysts also observed the 50-day moving average curling higher, reinforcing a bullish tilt. The takeaway: a brief dip looked plausible before renewed strength, and the market subsequently advanced.
Widely used indicators in technical analysis:
- MACD — Moving Average Convergence Divergence
- RSI — Relative Strength Index
- SMA — Simple Moving Average for bitcoin price
- 50/200 Moving Average Crossover
- OBV — On-Balance Volume
3. On-Chain Analysis in Crypto
A newer discipline unique to blockchains, on-chain analysis mines public ledger data to assess sentiment and anticipate flows. Traders use it to understand why different cohorts buy or sell—miners covering costs, funds taking profits, or retail accumulating dips.
Researchers segment participants into institutions, exchanges, miners, and everyday users, then monitor wallet balances, coin dormancy, and transaction volume, among other metrics on the blockchain.
According to Glassnode data, the share of bitcoin held by miners and very large holders has fallen meaningfully while ownership among smaller investors has expanded, an encouraging signal for decentralization over time.
Glassnode’s co-founder and CTO, Rafael Schultze-Kraft, has also highlighted a notable rise in whale entities and their supply since 2020, implying persistent activity from institutional investors, family offices, funds, and other high-net-worth participants.
Notable on-chain indicators include:
- Active addresses count
- Transaction count
- On-chain transfer volume
- Hash rate
- Miner revenue
- Total value locked (TVL)
- MVRV ratio — Market Value to Realised Value
- NVT ratio — Network Value to Transaction
- Realized capitalization
Combining All Three Methods of Analysis for Successful Cryptocurrency Trading
Each lens stands on its own, yet bringing them together provides a far richer read on the market. One data point may mislead, but many tiny brushstrokes can assemble a coherent picture of value, momentum, and behavior.
Total agreement is not required before placing a trade. With risk management and sensible allocation, you can scale into or out of positions as conditions evolve on the blockchain and in price.
As profiled in bitcoin success stories, the fund Three Arrows Capital started from a kitchen table with personal savings and later grew into a major operation with visible signs of wealth outside its office.
Years of results point to skillful execution and careful analysis rather than luck alone—and their performance notably outpaced simple buy-and-hold strategies over the same period.
