Cryptocurrency trade dominance with technical analysis
The world of cryptocurrency trade is a quick and unpredictable rhythm. With the increase of decentralized coins, such as Bitcoin, Ethereum and others, traders are constantly looking for new ways to achieve an advantage in this space. An effective technique used by operators to navigate the volatility of cryptocurrencies is the technical analysis (TA). In this article, we will explore the use of technical indicators for daily cryptocurrency trade.
What is the technical analysis?
Technical analysis is a method of evaluating financial markets based on historical data and graphic models. This involves analyzing the graphics to predict the future price movements, instead of depending exclusively on the fundamental analysis or the opinions based on feelings. Technical analysts analyze several indicators, such as mobile environments, relative resistance index (RSI) and Bollinger bands, to identify trends, support and resistance and possible purchase or sale signs.
How to use technical analysis for daily trade in cryptocurrency
- Choose a graphic platform : To use technical analysis, you will need a reliable graphic platform that admits cryptocurrency. Some popular options include tradingView, metatrader 4 and CMC markets.
- Select a few coins : Identify the pair (s) of cryptocurrency you want to trade. For example, if you are looking for Bitcoin (BTC/USD), you can use BTC/USD on your graphic platform.
- Open the graph : Open the graph for its pair of chosen coins and analyze it using technical indicators.
- Identify models : Look for models such as:
* Trends: Long -term trends, such as bullish trends or small trends, which may indicate possible purchase or sale signs.
* Support and resistance levels: Identify the levels in which prices tend to jump, indicating potential support or resistance areas.
* Indicators such as RSI, Bolninger bands and mobile media (MA): These indicators can help you measure the market feeling and predict price movements.
- Analyze graphic candles : Study the table candles to identify:
* Alcist or bassist candles: this indicates a possible investment of trends.
* BMPATIVE INVESTMENT MODELS: Look for models such as hammer, passing star or head and reverse shoulders that may indicate a potential investment in the trend.
- Use Graphic tools
: Use advanced graphic tools to analyze market data such as:
* Volume analysis: This helps you understand the feeling of market and price movements.
* Indicators of market feelings: such as relative force index (RSI) or stocal oscillator, which may indicate market attitudes towards a particular asset.
- Make a commercial decision : According to your analysis, make a commercial decision using the indicators and patterns of the chosen graphs. You can use:
* Buy signals when prices are broken over support levels or tap new maximums.
* Sell signals when prices are broken below resistance levels or lower minimums.
Example: Bitcoin technical analysis (BTC/USD)
Let’s look at BTC/USD in Trainingview using some technical indicators:
- Mobile environments : The 50 -day MA is $ 33,500, and the 200 -day MA is $ 32,000.
- Relative force index (RSI) : RSI is currently in 70, which indicates overcoming conditions.
- Bollinger bands : Bollinger Superior Band has reached a maximum of $ 36,000 and is now under the lower band.
According to these indicators, we can identify:
- A possible investment of trends as the price is reduced over 50 days (purchase signal).
- Overcoming conditions due to reading RSI more than 70.
- Dam candle models in the last days, indicating a possible bear investment.
Conclusion
The technical analysis offers a strong tool for traders who want to sail in the complex and unpredictable world of cryptocurrency.
