The Potential for Forecasting Cryptocurrency Price Movements Using the LSTM Method

Abstract

The Bitcoin (BTC) is a decentralized cryptocurrency that represents a new and unique medium currency, and it is often considered as the currency of the future. Therefore, it is important to understand how Bitcoin is valued and how different factors influence its extreme volatility. Several studies had discussion whether BTC prices are predictable, but the time periods of these studies were limited by data. Therefore, we believe that a current study is necessary when we consider the volume of the BTC price movements in 2021. This research is assessing the potential for forecasting cryptocurrency price movements using machine learning approach of LSTM method and closing price of BTC in five-year period. The results show that it is possible to forecast the BTC price and even potential rise and fall using LSTM.