Fundamental Analysis Explained: Stocks to Crypto

Fundamental analysis is the practice of evaluating what an asset is actually worth by studying the real-world factors that drive its value, earnings and revenue for a company, interest rates and economic data for a currency, on-chain activity and supply for crypto, rather than studying its price chart the way technical analysis does. None of those three input sets are interchangeable, which is exactly why this guide treats them separately rather than as one blanket definition.

What Is Fundamental Analysis?

Fundamental analysis asks one core question: what is this asset actually worth, and why? That question doesn't change depending on what you're analyzing, but the inputs used to answer it change completely. A company's fundamentals come from its financial statements. A currency's fundamentals come from a country's economic data. A crypto asset has neither of those things in the traditional sense, which is exactly why it gets its own section further down rather than a passing mention.

This is a different exercise from technical analysis, covered in full in Ouinex's Technical Analysis Explained, which studies price and volume history rather than underlying value. The two are complementary, not competing: fundamental analysis is generally used to decide whether an asset is worth holding at all, while technical analysis is generally used to time when to act on that decision. Most traders who use one eventually use both.

The rest of this page works through what fundamental analysis actually looks like in three settings that require completely different inputs: stocks, forex, and crypto. The first two are well covered by existing trading education; the third is where most of that education stops short, and where this page spends the most time.

Fundamental Analysis in Stock and Equity Markets

For a publicly traded company, fundamental analysis of stocks starts with the numbers in its financial filings. Earnings, a company's profit over a given period, and revenue, its total sales before costs are subtracted, are the two headline figures most fundamental analysis begins with. Together they answer a simple question: is this company actually making money, and is that changing over time?

The price-to-earnings ratio, or P/E ratio, takes a company's share price and divides it by its earnings per share, producing a single number used to gauge whether a stock is priced high or low relative to how much profit it's actually generating. A P/E ratio only means something in comparison, against the same company's own history, or against similar companies in the same industry, not as a standalone verdict on whether a price is fair. Companies expected to grow quickly tend to trade at structurally higher P/E ratios than slower-growing, more established companies, which is why comparing a fast-growing company's P/E against a mature company's P/E in a different industry rarely tells you much on its own.

Beyond earnings and P/E, fundamental analysis of a company typically also looks at revenue growth over time, debt levels relative to the size of the business, and the industry conditions the company operates in. None of these figures is read as a threshold to cross; each is read as context that builds a fuller picture of what the business is actually worth. A high P/E isn't automatically a warning sign, and a low one isn't automatically a bargain; both are read against what similar companies or the same company's own history look like, and against how quickly the business is actually growing.

Fundamental Analysis in Forex Trading

Currency fundamentals work differently, since a currency isn't a company and doesn't have earnings. Instead, forex fundamental analysis, also searched as fundamental analysis forex, centers on a country's economic data and central bank policy. The underlying logic still carries over from equities: an economy that's growing, controlling inflation, and offering an attractive return on capital is generally read as supporting a stronger currency, the same way a growing, profitable company is generally read as supporting a stronger stock price.

Interest rates, the rate a central bank sets for borrowing and lending within its economy, are usually the single biggest driver. A higher interest rate generally makes a currency more attractive to capital seeking a return, which is historically associated with relative currency strength against lower-rate currencies, though the relationship isn't mechanical or guaranteed. Inflation data, which measures how quickly prices are rising across an economy, is read alongside interest rates rather than separately, since central banks typically adjust rates partly in response to inflation trends.

Central bank decisions, the scheduled meetings where a central bank sets its policy rate, are a recurring fixture in forex fundamental analysis. Markets tend to react not just to what a central bank decides, but to whether that decision matched or diverged from what was already broadly expected going in, which is why the same rate decision can produce very different market reactions depending on the expectation it's measured against.

Beyond rates and inflation, forex fundamental analysis often also considers a country's trade balance, the difference between what it exports and imports, and broader GDP growth figures, both read as general indicators of an economy's underlying health rather than standalone triggers. As with equity fundamentals, none of these figures is meant to be read in isolation; a single data release is one input into a much larger, ongoing picture of an economy's condition.

What Counts as "Fundamentals" for Crypto?

None of the above transfers directly to a crypto asset. There's no company filing earnings, no shares outstanding to divide a price by, and no central bank setting a policy rate for a specific token. That doesn't mean crypto has no fundamentals, it means the inputs are different, and most TradFi-focused education stops here rather than working through what actually fills that gap.

On-chain activity is the closest crypto equivalent to a company's usage metrics. Because most blockchain activity is publicly viewable, data on active addresses, transaction volume, and network fees paid can be tracked directly rather than estimated, and on-chain data providers such as Glassnode and CoinMetrics build much of their methodology around exactly these metrics, an approach academic research on blockchain-derived valuation factors treats seriously enough to test directly against cryptocurrency returns. The underlying logic mirrors why a company's customer growth matters: a network seeing more genuine transaction activity is read as evidence of more actual usage, the crypto-native proxy for demand that a company's revenue growth represents in equity analysis. It's worth distinguishing this from the volume indicator covered in Technical Analysis Explained: that volume measures trading activity on a specific chart or exchange, while on-chain transaction volume measures actual movement of the asset itself across the network, independent of where or how it's being traded. The two can diverge, a chart can show low trading volume on one venue while the underlying network sees heavy genuine activity elsewhere, which is part of why on-chain data is treated as its own fundamental input rather than folded into technical volume.

Token supply schedule is the second major input. Knowing how many units of an asset exist now, how many can ever exist, and the rate at which new units are created (its emission schedule) or removed through burn mechanisms, functions somewhat like knowing a company's total share count. It doesn't predict where a price goes; it affects how a given amount of demand translates into price movement, since the same buying pressure spreads across a fixed supply differently than it would across a supply that keeps expanding.

Funding rate is a crypto-specific fundamental signal with no equity or forex equivalent at all. On a perpetual contract, funding rate mechanics work the same way covered in Ouinex's What Are Derivatives?: longs pay shorts when funding is positive, shorts pay longs when it's negative, but funding rate also functions as a live sentiment gauge in its own right. A sustained positive funding rate reflects a market where more capital is currently positioned long relative to short, historically read as a sign of prevailing bullish positioning; a sustained negative rate is the mirror case. This is different from a technical analysis reading of price action: funding rate isn't derived from chart shape at all, it's a direct measure of what positioned capital across the market is actually doing right now, which is why it gets read as a sentiment gauge rather than a chart pattern. Whatever a funding payment adds to or subtracts from an open position eventually flows into realized PNL once the position closes, tracked in Ouinex's Profit and Loss (PNL) glossary entry.

None of these three inputs behaves as cleanly as a company's quarterly earnings report. On-chain activity, supply schedules, and funding rate positioning are read as context, not as a formula that outputs a fair price the way a P/E ratio at least attempts to. Crypto prices are also driven heavily by broader speculation and shifts in risk appetite that have little to do with any single network's on-chain activity, which is worth stating plainly rather than overselling how far crypto fundamentals actually go toward explaining a given price move.

Taken together, on-chain activity, supply schedule, and funding rate positioning form the crypto-native version of the same question stock and forex fundamentals are built to answer: not whether a chart looks good, but whether the underlying thing being traded is actually being used, actually scarce or abundant, and actually reflects real positioned capital behind current prices. Whether any of that justifies a given price is still a judgment call, the same way it is for a stock's P/E ratio or a currency's interest-rate differential, not a calculation with a single correct output. Reading these inputs together is most directly useful applied live, on Ouinex's crypto perpetuals market, where funding rate and on-chain conditions are current inputs, not historical ones.

Fundamental vs. Technical Analysis, in Brief

The table below summarizes how the same underlying question, what is this asset actually worth, gets answered completely differently across stocks, forex, and crypto. None of the three columns is more "correct" than the others; each reflects what's actually available to study for that kind of asset.

The full breakdown of how fundamental and technical analysis combine in a single trading decision, including which one is doing most of the work at any given moment, is covered in Ouinex's dedicated Technical vs. Fundamental Analysis comparison.

FAQ

What is fundamental analysis in simple terms?

It's the practice of studying the factors that drive what an asset is actually worth, earnings for a company, interest rates for a currency, on-chain activity and supply schedule for crypto, rather than studying its price chart.

What is fundamental analysis for forex?

It centers on a country's economic data and central bank policy: interest rates, inflation, trade balance, and the scheduled decisions where a central bank sets its policy rate. These inputs replace the earnings and revenue figures used for stocks, since a currency has no company behind it, and markets tend to react as much to whether a data release matched expectations as to the figure itself.

Can you do fundamental analysis on crypto if there's no earnings report?

Yes, the inputs are just different. On-chain activity (active addresses, transaction volume, network fees), token supply schedule, and funding rate positioning on perpetual contracts all function as crypto-native fundamentals, covered in the section above. None of them works as cleanly as an earnings report, and all are read as context rather than a formula for fair value.

What's the difference between fundamental analysis and technical analysis?

Fundamental analysis studies what an asset is actually worth, earnings, macro data, or on-chain activity depending on the asset. Technical analysis studies price and volume history to read what has tended to happen next in similar chart setups. Most traders use both together, fundamental analysis to decide whether an asset is worth holding, technical analysis to time when to act on that decision. The full comparison is covered in Ouinex's Technical vs. Fundamental Analysis comparison.

Sources

1. Investopedia's fundamental analysis definition. Referenced for the base TradFi concept, not linked or quoted, competitor-adjacent per brief.

2. Glassnode and CoinMetrics. Named as examples of on-chain data providers to ground the methodology claim, not linked as a promotional endorsement, per brief Section 9.

3. Academic research on blockchain-derived valuation factors and cryptocurrency returns, ScienceDirect

Risk Disclaimer

Virtual assets may lose their value in full or in part and are subject to extreme volatility. You may lose the full amount you invest, and your investment does not benefit from any form of financial protection.

Written byNjami Saadaoui