With so many resources, apps, and platforms available to crypto traders and investors, it’s hard to find the ones that count. Once you have an exchange and wallet, you need a tool to analyze the market in order to make more profitable investments. Cryptocurrency tools have a lot of overlap, many exchanges are also wallets, portfolio management also give some analytics, notification tools can double as risk management, but when it comes to analytics it’s wise to use a tool specifically meant to analyze the cryptocurrency market.
Any analytics tool worth its salt, let’s take Google Analytics for example, purely focuses and is specifically designed for its purpose. Any other features it offers are built in as an additional way to analyze your information and understand it.
With that said, even with the high influx and new investors and previously finance and stock oriented traders, it’s hard to find great tools to use. The technical and deep analysis used in traditional finance analytics isn’t the standalone data beginner investors can rely on or properly use. But as the market grows, new tools are appearing to bridge these gaps with better user interfaces to provide accurate data, predictive computational analytics, and a seamless experience.
“Strategy is everything in crypto and part of strategy are the tools in your arsenal.”
-Peter Borovykh, RoninAi Platform
For crypto trading you want an analysis tool that can tell you the strength of a coin, assess the bullish/bearish sentiment of a coin, how updates to blockchain protocol will affect it, and so many other factors with the ultimate goal of figuring out if it’s going to go up or down in price. When a stable coin is down, you buy knowing it’s cheap now and going to go up in price later, when it’s up a lot, you sell, knowing it’ll inevitably drop again.
That sounds a lot like the stock market, which is why so many tools run on the same premise as stock trading tools, but crypto isn’t stock. It’s much more volatile, harder to predict, and affected by more factors and more heavily. Also keep in mind that trading stock is already complicated and those tools were never meant for beginners so unless you have extensive stock trading experience with technical analysis tools, it’s going to be difficult to fully utilize at first.
Something easier to grasp is social sentiment. If everyone thinks it’s doing well and are positive about a coin, it’s likely to go up, and vice versa for when it’s bearish (negative). Ai and machine learning work really well for assessing that much data in a brief amount of time. Analysis tools for crypto are starting to get more sophisticated, and there are going to be better ones out there that can actually interpret data for you and self-adjust algorithms for changing markets.
Right now the only one that seems to analyze and interpret both technical, crypto specific, and social data are RoninAi whose saas platform is launching this summer.
It utilizes the power of Artificial Intelligence and Machine Learning to offer its users dynamic analysis on cryptocurrencies, allowing them to trade smart and capitalize on market growth and avoid market downswings. RoninAi uses its unique AI to analyze markets across several areas, including technical analysis, market trends, and social sentiment, the latter of which was recently proven to be a crucial determining factor of cryptocurrency prices in a study conducted by four academic institutions.
“The opportunities on the quant side are very appealing, especially if you have a team that is strong on both crypto, quantitative trading, and machine learning. You can do arbitrage, long/short, etc.”
-Paul Veradittakit, Panterra Crypto Hedgefund
Artificial Intelligence (AI) is one technology that many traders, especially the experienced ones, are turning to in order to maximize profits in up markets and minimize risk in down markets. Unlike bots, which use static algorithms, AI uses machine learning to optimize trading, making it more like a PhD for every cryptocurrency trading indicator than a simple trading bot.
Humans can, relatively, analyze a lot of information. Spending a few hours, humans can read expert articles, track markets, and keep their ear to the ground for any news that may change cryptocurrency prices. However, one human will never come close to an AI’s ability to parse an incredible amount of information in no time.
Additionally, AI can analyze social sentiment with lightning speed and precision, one crucial element that has been proven to be a determining factor in cryptocurrency prices. This ability gives AI a huge leg up on any single human investor, as it automatically has more information at its disposal. It takes a human three seconds to analyze a tweet, but it takes AI less than one millisecond to analyze a tweet as bullish or bearish.
In a similar vein, AI can recognize trends and employ strategies that humans simply cannot. While it may be easy to see if a market is rising or plummeting, AI can see beyond this, processing information and picking out points where the market is likely to take a turn one way or the other. In this same vein, AI has the power to test thousands of strategies against the market to find which one fits the best, something that humans certainly do not have the time nor money to undertake.
AI can also employ more complex trading strategies that are difficult to execute for human traders, and can adjust on the fly to maximize profits. Humans can only execute trading strategies during a certain portion of a day, while AI can trade around the clock, altering strategies to maximize gains. Leveraging the delicate and more nuanced changes in the market is something that only AI can do on a consistent and meaningful basis.
Humans are by nature not analytical beings. We struggle to accept losses when they must come and cling to the hope that a profitable investment will become even more profitable, despite signs pointing elsewhere. The Sunk-Cost Fallacy is a perfect example of this. Artificial Intelligence, quite to the contrary, never struggles with this, allowing it to know the best entry and exit points given the mass of information it has at its disposal.
There’s been some ICO’s with promising Ai cryptocurrency analysis tools, but realistically we don’t know when, if ever, these will become fully realized and built out. On the other hand, SAAS tools like RoninAi are well into development and expect to finish their product later this summer and are offering pre-launch deals before then.