Technical Evaluation: Analyzing Price Charts to Get Information on the Cryptocurrency Market

The cryptocurrency world has become increasingly popular in recent years, with new coins and tokens emerging daily. Although many investors are attracted to the potential of high returns, a more subtle approach is usually required to make informed decisions about cryptocurrency investment. Technical assessment, specifically analyzing price charts, can provide valuable information on market trends and standards.

Understanding price charts

A price chart is a graphic representation of a security history of a security over time. It provides a visual representation of the rising or descending trend of security, as well as the levels it has reached during its historical performance. Technical analysts use various technical indicators to analyze these graphs and make predictions about future market movements.

Indicators -Chave

Several important technical indicators are commonly used to analyze price charts:

• Mobile Average : These indicators outline the price of a security during a specific time period, softening the data and identifying trends.

• Relative Strength Index (RSI) : This indicator measures the strength of the recent price movements of a security, calculating the difference between its current price and its 50 -day moving average.

• Bollinger Bands : These indicators plot two standard deviations above and below the 21 -day moving average of a security, providing information about volatility and trends reversal.

• Stock Oscillator : This indicator calculates the percentage of time that an oscillator is above or below a certain level, helping to identify excessive and super sold conditions.

Analyzing Price Charts

When analyzing price charts for information on technical evaluation, it is essential to consider short and long term trends. Here are some important items:

* Trends : Identify the general trend of safety by analyzing their short-term (7-50 days) and long-term (200 days) moving averages.

* Support and resistance : Look for areas where the price has recovered consistently, indicating strong support levels, as well as areas where the price has historically decreased, indicating resistance levels.

* Candle patterns : Study candle patterns to identify possible purchase or sale signs, such as:

+ High engagement: A green swallowing pattern indicates a high potential trend.

+ Low engagement: A red swallowing pattern suggests a low potential trend.

+ Hammer: A hammer form indicates a potential purchase signal.

* Limits of the track : Identify areas where the price historically found support and resistance as they can provide clues about future price movements.

Case study: bitcoin

Let’s look at Bitcoin Price Charts (BTC) to illustrate how technical assessment can be applied:

In 2017, Bitcoin experienced a significant increase in the price after the event half that reduced its supply. This led to a rapid increase in demand, raising prices above $ 20,000.

Here are some -chave indicators used during this period:

* Mobile Average

: 50 and 200 -day moving averages were above resistance levels at the time.

* Relative Strength Index (RSI) : RSI was sold too much, indicating that safety had reached a low point.

* BOLLINGER BANDS : The bands were inflated with the price, indicating greater volatility.

The combination of these indicators suggested that the price would probably continue up. In 2019, Bitcoin experienced another significant increase in the price after the event by half, pushing -over $ 40,000.

Conclusion

Technical assessment provides a valuable tool for analyzing price charts and identifying possible trends, supports and resistance levels.