Forecasting cryptocurrency prices using Recurrent Neural Network and Long Short-term Memory (2024)

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  • I. Nasirtafreshi Department of Artificial Intelligence, Faculty of Engineering, Islamic Azad University, Ghods Branch, Tehran, Iran

    Department of Artificial Intelligence, Faculty of Engineering, Islamic Azad University, Ghods Branch, Tehran, Iran

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Published:01 May 2022Publication History

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Abstract

Abstract

The rapid development of cryptocurrencies over the past decade is one of the most controversial and ambiguous innovations in the modern global economy. Numerous and unpredictable fluctuations in cryptocurrencies rates, as well as the lack of intelligent and proper management of transactions of this type of currency in most developing countries and users of this type of currency, has led to increased risk and distrust of these roses in investors. Capitalists and investors prefer to invest in programs which have the least risk, the most profit and the least time to achieve the main profit. Therefore, the issue of developing appropriate methods and models for predicting the price of cryptographic products is essential both for the scientific community and for financial analysts, investors and traders. In this research, a new deep learning model is used to predict the price of cryptocurrencies. The proposed model uses a Recurrent Neural Networks (RNN) algorithm based on Long Short-Term Memory (LSTM) method to predict the price. In the presented results of the simulation of the proposed method, factors such as the Root Mean Square Error (RMSE), Mean Absolute Error (MAE), Mean Absolute Percentage Error (MAPE), R-Squared (R2) were compared with other similar methods. Finally, the superiority of the proposed method over other methods was proven.

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Forecasting cryptocurrency prices using Recurrent Neural Network and Long Short-term Memory (38)

    Index Terms

    1. Forecasting cryptocurrency prices using Recurrent Neural Network and Long Short-term Memory
      1. Applied computing

        1. Computing methodologies

          1. Machine learning

            1. Machine learning approaches

              1. Neural networks

          2. Information systems

            1. Security and privacy

              1. Cryptography

              2. Theory of computation

              Index terms have been assigned to the content through auto-classification.

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                Forecasting cryptocurrency prices using Recurrent Neural Network and Long Short-term Memory (39)

                Data & Knowledge Engineering Volume 139, Issue C

                May 2022

                232 pages

                ISSN:0169-023X

                Issue’s Table of Contents

                Elsevier B.V.

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                  In-Cooperation

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                    Elsevier Science Publishers B. V.

                    Netherlands

                    Publication History

                    • Published: 1 May 2022

                    Author Tags

                    • Cryptocurrency
                    • Recurrent Neural Network
                    • Long Short-term Memory
                    • Deep learning
                    • Forecasting prices
                    • Time series data

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                    • Forecasting cryptocurrency prices using Recurrent Neural Network and Long Short-term Memory (40)

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                          Forecasting cryptocurrency prices using Recurrent Neural Network and Long Short-term Memory (2024)

                          FAQs

                          How accurate is LSTM Bitcoin price prediction? ›

                          built an LSTM-based model and executed a series of experiments. The result showed an average of 55.9% accuracy, which is promising [20].

                          What is the most accurate algorithm for crypto prediction? ›

                          Khedr et al. (2021) concluded that LSTM is considered to be the best method for predicting cryptocurrency price time series due to its ability to recognize long-term time-series associations.

                          How to predict cryptocurrency prices using machine learning? ›

                          Liu et al. (2021) use a deep learning method called Stacked Denoising Autoencoders (SDAE) to predict the future price of Bitcoin and find that it performs better than back propagation neural networks and support vector machines.

                          What is the best model for crypto prediction? ›

                          Bi-LSTM presented the most accurate prediction compared to GRU and LSTM, with MAPE values of 0.036, 0.041, and 0.124 for BTC, LTC, and ETH, respectively. The paper suggests that the prediction models presented in it are accurate in predicting cryptocurrency prices and can be beneficial for investors and traders.

                          How accurate are crypto price predictions? ›

                          Bitcoin Price Predictions are Hype, Not Fundamentals

                          In many instances, cryptocurrency is overhyped by notable figures, business owners heavily invested in digital assets or others who have an interest in profiting if prices rise. However, there are no investing fundamentals behind most cryptocurrencies.

                          Are crypto forecasts accurate? ›

                          Are crypto price predictions accurate? Very often, they are not. We don't know the future and it would be wrong to think that we can know exactly what is going to happen. Crypto predictions – like pretty much all financial predictions – are very often wrong, especially as they go further and further into the future.

                          Is there any app to predict cryptocurrency? ›

                          WalletInvestor is the tool for forecasting cryptocurrency prices, utilizing machine learning algorithms to provide daily and long-term predictions for over 880 digital currencies.

                          How do you get accurate crypto signals? ›

                          If you are looking for an extremely accurate Crypto trading signals provider then Crypto Inner Circle might perfectly meet your needs. Its signals' performance is a staggeringly high 92%, a number which is also verified. Additionally, it offers signals for various coins, which is great for portfolio Crypto traders.

                          Is there an algorithm for cryptocurrency? ›

                          Cryptocurrency trading algorithms are sophisticated computer programs that automatically execute buy and sell orders on digital assets. Traders often refer to these algorithms as bots, which take care of the hard work of scanning the market for opportunities, opening positions, and closing trades.

                          Can AI predict cryptocurrency? ›

                          AI-based tools aim to provide assistance in various aspects of cryptocurrency trading by leveraging their ability to analyze large data sets, identify patterns, and make data-driven predictions.

                          How do you know if a coin will pump? ›

                          Look at the market cap. The market cap of a coin is the total value of all the coins in circulation. Coins with a higher market cap are generally more stable and less likely to pump. However, there are also coins with a lower market cap that have the potential to pump significantly.

                          What is the AI tool for crypto price prediction? ›

                          Crypticorn, which uses cutting-edge artificial intelligence, offers a comprehensive package of services to help traders manage the complexity of the crypto market, including AI-driven price predictions, automated trading bots, and sentiment analysis.

                          What is the algorithm for Bitcoin price prediction? ›

                          In this work, the KNN and SVM algorithms are used to accurately predict the price of bitcoin. The outcome demonstrated that the proposed SVM performs better than the current KNN. The main flaw in the current system is its lack of accuracy, but with the suggested method, prediction accuracy is good (Fig. 2).

                          What is the AI that analyzes crypto? ›

                          AI crypto trading bots are software programs that leverage AI algorithms to automate trading processes in the cryptocurrency market. They are designed to analyze vast amounts of data from various sources, including market trends, news, and social media sentiment, to make informed trading decisions.

                          How LSTM works in Bitcoin price prediction? ›

                          Unlike the RNN, LSTM does not have the disadvantage is that LSTM can manage the memory at each input by using memory cells and gate units. information should be dropped from the cell. memory cell at time t. range 0 to 1, the function is used to put the value between -1 and 1.

                          What is the success rate of LSTM? ›

                          The LSTM unit Recurrent Neural Network (RNN) uses the Swish activation function in Feed Forward Neural (FFN) Network for the classification. The proposed LSTM obtained better accuracy of 71.64% when compared with existing methods such as RNN that attained 65.67% and Artificial Neural Network (ANN) of 69.7%.

                          How accurate is LSTM stock? ›

                          This module predicts the average trend of the next three days from day t and achieves 66.32% accuracy. Although they have proved the effectiveness of sentiment analysis by improving prediction performance, they have not utilized the strength of the LSTM model by passing input data of succeeding days.

                          Is LSTM good for forecasting? ›

                          Using LSTM, time series forecasting models can predict future values based on previous, sequential data. This provides greater accuracy for demand forecasters which results in better decision making for the business.

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