## Why Fundamental Analysis is Important for Crypto Traders

Many traders are still confused between various market analysis methods. Before understanding the differences, we need to know that fundamentals are the foundation in evaluating an asset. Although it sounds complicated, this concept is actually simple and very useful for long-term investment decision-making.

## What Is Fundamental and How Does It Work

Fundamental Analysis is the process of examining the true value of an asset or business by looking at various qualitative and quantitative factors. Investors and traders use this approach to determine whether the current asset price is too high (overvalued) or too low (undervalued).

In conducting Fundamental Analysis, we do not only focus on past performance. This method considers the micro and macro economic conditions that may affect certain markets. The factors evaluated include the company's management reputation, industry health, market capitalization, and various other economic indicators.

Fundamental Analysis advantages are able to reveal the influence of external factors that are not directly visible. For example, the quality of leadership and the track record of leaders in other business projects can provide valuable insights into the potential of assets in the future. Similarly, understanding the specific market of an industry and the prospects of the products or services offered.

## Fundamental Analysis on Cryptocurrencies

Although traditional fundamental analysis is often applied to stock valuation, this method is also highly relevant for assessing cryptocurrencies and other digital assets. By conducting crypto fundamental analysis, traders can make more informed investment decisions and reduce speculative risks.

## Fundamental vs Technical: Which is More Important

The fundamental difference between these two methods lies in their analytical focus. Fundamental Analysis looks at the big picture by considering all factors that influence asset value. Meanwhile, technical analysis relies solely on historical market data and chart patterns to predict price movements based on past volume and trends.

Fundamental Analysis aims to find the real value of an asset, while technical analysis serves more as a tool for predicting short-term price action. Most traders and investors believe that both have their unique value. Therefore, a balanced and contextual combination of the two will provide a more comprehensive and accurate analysis result compared to relying on just one method.