Technical analysis of cryptocurrency **
The cryptocurrency world has experienced rapid growth and development in recent years, and a wide range of cryptocurrencies offering new profit opportunities for investors. However, navigation in this complex market can be scary even for experienced merchants. In this article, we will study technical analysis techniques that can help investors of cryptocurrencies make deliberate decisions and increase their chances of success.
What is technical analysis?
Technical analysis refers to the research of the financial markets charts, models and trends to predict future price movements. This includes the use of various tools and techniques to identify potential trade options and make deliberate investment decisions. The technical analysis of the cryptocurrency takes into account the specific characteristics of each coin, such as its supply and demand level, trade volumes and market mood.
Key Technical Analysis Indicators
Here are some main technical analysis indicators that can be used in cryptocurrency markets:
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Moving average
: These indicators indicate the price level over a period of time, allowing traders to set trends and models.
- Relative Strength Index (RSI) : This indicator measures a recent price change to determine excessively combating or selling conditions.
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Bollinger Stranes : These bands reflect the difference between stock price and its variable average, providing an indication of volatility.
- Stochastic oscillator : This indicator measures the relationship between the current price and price history to identify excessive or selling conditions.
- MacD (variable average convergence deviation) : This indicator compares the pulse rate (fast) and a trend (slow) to identify potential buying or sales options.
Chart Models
Understanding the diagram models is essential for technical analysis as they can help traders predict future price movements. Here are some common chart models used in cryptocurrency markets:
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Head and shoulders : An inverted model that occurs when the security price reaches its range end and then turns direction.
- Triangles : A formation in which prices are made up of two opposite trends and then inverted are often followed by a continuation or repair trend.
3
Waves : A series of sequential lower levels and higher drops indicating possible support or resistance level.
News and Events
The cryptocurrency market is strongly influenced by news and events that can affect price movements. Here are some key factors to consider:
- Legislative Changes : Government rules can significantly influence the adoption and use of cryptocurrency.
- Economic Indicators : GDP growth rates, inflation levels and employment can affect market mood.
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Market mood : News and updates in social media can lead to a positive or negative deviation in the market.
Cryptocurrency Trade Tools
Traders need access to reliable tools and platforms to effectively use technical analysis techniques. Here are some popular options:
1st
Trading platforms : Sites such as Coinbase Pro, Binance and Kraken offer advanced trading opportunities.
- Chart Software : Tools such as Metatrader 4 (MT4) and MT5 provide a number of technical analysis and diagram.
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Data providers : API and data flows from stock exchanges such as CoinMarketcap, Coingecko and CoinDesk provide real -time market data.
Cryptocurrency Trade Practice
In order to succeed in cryptocurrency trade, merchants must follow this best practice:
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Diversify your portfolio : Spread investment in various cryptocurrencies to reduce risk.
- Set clear goals : Define your investment goals and risk tolerance before entering the market.
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