<p>Forecasting cryptocurrency prices is challenging due to market volatility and dynamic behavior. This study aims to enhance prediction accuracy for Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) by proposing a novel deep learning framework. The framework integrates the Sparrow Search Algorithm (SSA) for selecting optimal technical indicators with Bidirectional Long Short-Term Memory (Bi-LSTM) networks. Technical indicators derived from historical market data, including prices and trading volume, are analyzed to improve forecasting. The results demonstrate that the proposed framework effectively enhances prediction accuracy for BTC and LTC. For ETH, the best performance is achieved using all 34 indicators with the Bi-LSTM model. These findings highlight the importance of selecting relevant indicators and demonstrate the potential of advanced deep learning models in addressing the complexities of cryptocurrency markets. This research provides valuable insights and a reliable framework for improving cryptocurrency price predictions.</p>

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Verifying Technical Indicator Effectiveness in Cryptocurrency Price Forecasting: a Deep-Learning Time Series Model Based on Sparrow Search Algorithm

  • Ching-Hsue Cheng,
  • Jun-He Yang,
  • Jia-Pei Dai

摘要

Forecasting cryptocurrency prices is challenging due to market volatility and dynamic behavior. This study aims to enhance prediction accuracy for Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) by proposing a novel deep learning framework. The framework integrates the Sparrow Search Algorithm (SSA) for selecting optimal technical indicators with Bidirectional Long Short-Term Memory (Bi-LSTM) networks. Technical indicators derived from historical market data, including prices and trading volume, are analyzed to improve forecasting. The results demonstrate that the proposed framework effectively enhances prediction accuracy for BTC and LTC. For ETH, the best performance is achieved using all 34 indicators with the Bi-LSTM model. These findings highlight the importance of selecting relevant indicators and demonstrate the potential of advanced deep learning models in addressing the complexities of cryptocurrency markets. This research provides valuable insights and a reliable framework for improving cryptocurrency price predictions.