The price of Bitcoin and cryptocurrencies, in general, has always faced high volatility, many pro or amateur traders try to predict a future rise or fall but it is often a risky bet as prices only do as they please. Others say that the solution is in the A.I! Because it could calculate an estimate close to reality based on observation. This is the bet we take because we think it is the most rational and efficient….
Price Prediction: we left this feature aside for a while because we considered that our algorithms were not yet optimal enough. But behind the scenes, we have continued to improve the system to better serve you! The future launch of our pro version is therefore an ideal time to discover this incredible indicator that will allow you to estimate the price of bitcoin up to 6 hours with a high percentage reliability! However, our forecast system is based on price history, if the market adopts an unprecedented behaviour, it is impossible for an AI to predict exactly what will happen. It is therefore preferable to include this indicator in an overall strategy.
Which data do we use?
In order to calculate the most accurately a price in the near future, we must apply machine learning models (LSTM: Long short-term-memory) deployed on the Bitcoin price history over the last 30 days. This allows systemic trends, noise and patterns to be identified and events to be estimated on a probabilistic basis. Thanks to this, Daneel is able to give a price forecast up to 6 hours whose reliability score has been estimated between 80–85% thanks to back-testing. Indeed, we have tested our model on the last few years of Bitcoin price evolution and we are quite satisfied with the results. Of course, reliability will increase for estimations of less than 6 hours.
We would rather say estimation than prediction
It is safe to say that this is only an estimation, no AI can read in the future, it is rather a question of studying key elements to try to know what will happen next, we will rather talk about the probability of occurrence. The forecast becomes incorrect during high volatility or exceptional events such as a fake news or a rumour that would upset the natural evolution of the market. However with Daneel’s fakenews analyzer, you will be able to stay informed and cautious about potential market movement.
An evolutionary model
Just as AI improves itself, we will give it ever more effective learning skills. This is why we will develop our model by taking into consideration technical data and data from current events and social media (sentiment, volume of current events and data on social networks…)
Let’s go deep inside the feature
The forecast is displayed directly on the price graph and takes the form of a green candle with an estimate by period: the maximum and minimum price and finally the closing result of the period. Basically a candle all that has more traditional.
On the price axis, we can see the actual price in green and the last prediction in yellow. It gives an idea of the price variation within 6 hours.
For greater precision, the estimates are included in a profit and loss table just below the graph. This allows you to see at a glance the calculated minimums and maximums for all the next 30 minutes and up to 6 hours.
In order to verify the relevance of the indicator, a history gives an idea of the effectiveness of previous estimates. Thus, the user will have a view on the estimates of the last few hours with a corresponding reliability score. Each estimate is correlated with the result finally obtained: “close price was”.
The next article will focus on the whales alert feature being developed by our team.
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Daneel provides unchallenged news curation and market data in the Blockchain world, thanks to Artificial Intelligence…