According to the U.S. government's Internal Revenue Service (IRS), a virtual currency is a digital representation of value, other than a representation of the U.S. dollar or a foreign currency ("real currency"), that functions as a unit of account, a store of value, and a medium of exchange. The IRS defines cryptocurrencies as a virtual currency that uses cryptography to secure digitally recorded transactions on a distributed ledger, such as a blockchain.
Cryptocurrencies are mainstream assets electronically traded by many investors globally, similar to stocks and other equity types. There are many different cryptocurrencies, with several more being introduced to the public every few months for the opportunity to make transactions based on these assets. There is value to examining factors that drive cryptocurrency asset prices since the market size of these currencies is currently over 1 trillion USD in traditional fiat USD and over 32 trillion USD by 2027.
Cryptocurrencies significantly influence the global economy because of their growing market size. Researchers examining cryptocurrency pricing predictors can inform government, business, and retail investors in making more profitable trading strategies.
This research paper examines the following question as it pertains to cryptocurrencies:
Can the technical analysis method of analyzing moving averages in Bitcoin prices be effective in predicting future upward price movement?