Analysis and Forecasting of Cryptocurrency Markets Using Bayesian and LSTM-Based Deep Learning Models

The rapid rise of the prices of cryptocurrencies has intensified the need for robust forecasting models that can capture the irregular and volatile patterns. This study aims to forecast Bitcoin prices over a 15-day horizon by evaluating and comparing two distant predictive modeling approaches: the Bayesian State-Space model and Long Short-Term Memory (LSTM) neural networks. Historical price data from January 2024 to April 2025 is used for model training and testing. The Bayesian model provided probabilistic insights by achieving a Mean Squared Error (MSE) of 0.0000 and a Mean Absolute Error (MAE) of 0.0026 for training data. For testing data, it provided 0.0013 for MSE and 0.0307 for MAE. On the other hand, the LSTM model provided temporal dependencies and performed strongly by achieving 0.0004 for MSE, 0.0160 for MAE, 0.0212 for RMSE, 0.9924 for R2 in terms of training data and for testing data, and 0.0007 for MSE with an R2 of 0.3505. From the result, it indicates that while the LSTM model excels in training performance, the Bayesian model provides better interpretability with lower error margins in testing by highlighting the trade-offs between model accuracy and probabilistic forecasting in the cryptocurrency markets.