faisalcryptolab

TRADING MASTER CLASS BY #FaisalCryptoLab
Lesson 3 — Technical vs Fundamental Forecasting (with Key Fundamentals)
In this lesson, we go deeper into the relationship between technical and fundamental analysis, how they complement each other, and the essential fundamental metrics every crypto trader should understand.
Both approaches aim to answer the same question:
“Where is price likely to go next?”
But they approach the question from different perspectives.

1) Technical Analysis — Studying the Effect
Technical analysis focuses on market action, meaning the actual movement of price over time.
It studies price trends, momentum, volume, and chart patterns.Price is treated as the ultimate output of all market forces — including fundamentals, news, and trader psychology.Technical traders focus on what the market is doing, not necessarily why.
Why technical analysis works:
Price reflects supply and demand:Rising → Demand exceeds supplyFalling → Supply exceeds demandPrice acts as a leading indicator, moving before fundamentals are widely recognized.Charts show the collective behavior of all participants, revealing trends and possible turning points.
Key insight:
Technicians do not try to predict why a market moves; they respond to what the market is showing.
By following price action, a trader can often enter early and ride trends before the broader market reacts.
2) Fundamental Analysis — Studying the Cause
Fundamental analysis focuses on why markets move, studying the forces behind price changes.
Examines supply and demand, economic data, financial metrics, and intrinsic value.Determines the true value of an asset.
How it works in practice:
If market price < intrinsic value → The asset is undervalued → Potential buy opportunityIf market price > intrinsic value → The asset is overvalued → Potential sell signal
Fundamentalists want to understand the causes of price movement — earnings, adoption, network growth, or macro events — before making a decision.
Key insight:
Fundamental analysis gives context for long-term value, but it does not always indicate short-term market timing.
3) Technical vs Fundamental — The Core Difference
Technicians study the effect (price action).Fundamentalists study the cause (economic and financial forces).
Important point:
Technical analysis includes fundamentals indirectly, because price already reflects them.Fundamental analysis does not include price behavior automatically, so relying on fundamentals alone can make timing trades difficult.
Real-world application:
Price often moves before fundamentals are fully recognized.Early trends can start without obvious changes in reports or news.Traders using only fundamentals may miss these early moves.
4) Why Price Often Leads Fundamentals
Price is a leading indicator because it reacts to:
Trader expectationsAnticipated eventsUnknown or future fundamentals
Example:
Many major bull and bear markets began before obvious fundamental changes.
By the time the broader market recognizes the news, the trend is often well underway.
Implications for traders:
Charts may conflict with fundamentals at turning pointsExperienced traders trust price action over conventional wisdom for timing tradesWaiting for news can mean missing early profits
5) Key Fundamental Topics Every Crypto Trader Should Know
Understanding fundamentals helps with long-term perspective while technicals guide short-term decisions.
Market Cap (MCAP): Total value of circulating coins (Price × Circulating Supply)Fully Diluted Value (FDV): Total value if all tokens were releasedCirculating Supply: Coins currently available in the marketMax Supply: Maximum number of coins that will ever existTotal Supply: Coins minted so far, including those not circulatingInflation Rate: Speed at which new coins are createdTokenomics: Overall economic structure (rewards, burns, distribution)Utility: Real-world use and function of the tokenAdoption Metrics: Users, transactions, network activityLiquidity: Ease of buying/selling without impacting price
Why these matter:
They indicate scarcity, growth potential, and sustainability.They help assess long-term value and risk.Combined with technical analysis, they provide a complete view of both timing and context.
6) Lesson 3 Summary
Technical analysis: Focuses on what the market is doing and how to act on trends.Fundamental analysis: Focuses on why the market is moving, providing long-term context.Price often leads fundamentals: Early moves appear before news or economic changes are widely recognized.Key fundamentals: Market cap, FDV, circulating/max supply, tokenomics, utility, adoption, liquidity.Trading edge: Combine fundamentals for context and technicals for timing.
Key takeaway:
Price always tells the real-time story. Fundamentals explain the story’s background.
Mastering both gives traders a complete understanding of markets.
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This is Lesson 3 of #FaisalCryptoLabLessons
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