Predicting cryptocurrency prices with ML-DL models: A hybrid expert system approach

Abstract

Cryptocurrency price prediction poses significant challenges due to the inherent volatility and nonlineardynamics of the market. This study introduces a hybrid stacked modeling framework that integrates machine learning (ML) and deep learning (DL) techniques, capitalizing on their complementary strengths-ML models are effective at capturing nonlinearfeature interactions in structured data, while DL architectures are adept at modeling temporal dependencies in sequential data. The proposed model leverages historical price data, technical indicators, macroeconomic variables, and sentiment metrics, with feature engineering applied to enhance predictive capability. Empirical evaluation was conducted through two experimental setups: (i) short-term, monthly segment analysis and (ii) long-term generalization via five-fold cross-validation. The hybrid model outperformed individual baseline models, achieving up to 18.3% lower RMSE and 6.7% higher directional accuracy. Additionally, it yielded superior risk-adjusted returns, with Sharpe Ratios reaching 0.094 on the Ethereum dataset. Beyond technical improvements, this research offers foresight into digital financial markets, providing a robust tool for investors, institutions, and policymakers navigating the evolving cryptocurrency landscape. The model supports more informed decision-making, enhances market oversight, and contributes to the development of adaptive regulatory frameworks for digital finance.