Abstract
Cryptocurrency is recognized as a leading digital currency by its peer-to-peer transfer capabilities and secure features. Accurately forecasting cryptocurrency price trends holds substantial significance for investors and traders, as they inform critical decisions regarding the acquisition, divestment, or retention of cryptocurrencies, guided by expectations of value, risk assessment, and potential returns. This study also aims to identify a resourceful technique to efficiently forecast prices of cryptocurrencies such as Bitcoin (BTC), Binance (BNB), Ripple (XRP), and Tether (USDT) using optimal data-driven models (LSTM, GRU, and BiLSTM models) using bias correction. The proposed methodology includes collecting cryptocurrency data and precious metal data from Coindesk and BullionVault, respectively, and then finding the optimal model input combination for each cryptocurrency by lag adjustment and correlating feature selection. Hyperparameter tuning was performed by trial-and-error technique, and an early stopping function was applied to minimize time and space complexity. Bias correction (BC) is applied to model-forecasted price trends to reduce errors in evaluation and to enhance accuracy by adjusting model outputs to reduce prediction bias, providing a refined alternative to traditional unadjusted deep learning methods. GRU-BC outperformed other models in forecasting Bitcoin (with MAE 25.291, RMSE 31.266, MAPE 2.999) and USDT (with MAE 0.0006, RMSE 0.0012, MAPE 0.0622) price trends, while BiLSTM-BC was superior in predicting XRP (with MAE 0.0129, RMSE 0.0171, MAPE 2.9013) and BNB (with MAE 2.2759, RMSE 2.8357, MAPE 1.9785) market price flow.
Published Version
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