tl;dr
Technical analysis has a long history and has been used in the crypto market to assess market trends. It includes bearish and bullish outlooks, tools like Bollinger Bands and Fibonacci Retracement, and indicators such as MACD and Relative Strength Index. The Fear and Greed Index helps gauge investor...
Technical analysis has a long history and has been used in the crypto market to assess market trends. It includes bearish and bullish outlooks, tools like Bollinger Bands and Fibonacci Retracement, and indicators such as MACD and Relative Strength Index. The Fear and Greed Index helps gauge investor sentiment, while chart patterns and volume analysis are used to assess market interest and potential trend reversals. Understanding tokenomics is crucial for evaluating the potential value and sustainability of a cryptocurrency project. There's no exact science to reading markets. But that hasn't made technical analysis any less popular among crypto traders looking for the next obscure indicator that will lead their portfolio to glory. Technical analysis has, technically, been around for centuries. Its roots can be traced back all the way to the 17th century during the Dutch Golden Age when traders started studying prices to predict future market behavior. But it's more accurate to say that what most Twitter anons and crypto market analysts think of as "technical analysis" originated in the early 20th century. That's thanks to Charles H. Dow, the founder of the Dow Jones Industrial Average and co-founder of The Wall Street Journal.
While the foundational elements of technical analysis hold up, analysts have had to adjust the way they're applied and interpreted in the often volatile and always-on cryptocurrency market. What follows is a mix of classic technical analysis terms and ones that have been introduced over the past decade as chart watchers have figured out what to watch for in crypto markets.
Bearish outlook reflects pessimism about future performance of an asset or market. Bitcoin NVT Ratio used to assess whether Bitcoin is overvalued or undervalued. Bollinger Bands plotted two standard deviations from a simple moving average. Breakout refers to price movement through a level of resistance or support. Bullish outlook reflects optimism about future performance of an asset or market. Candlestick Chart describes high, low, opening, and closing prices. Doji indicates indecision among traders, potential reversal or continuation. Elliot Wave Theory looks for recurrent long-term price patterns. Exponential Moving Average gives more weight to most recent prices. Fear and Greed Index gauges sentiments of investors. Fibonacci Retracement identifies potential support and resistance levels. Gap occurs when price makes a sharp move with no trading in between. MACD shows relationship between two moving averages of a security's price. Market Cap is the total market value of a cryptocurrency's circulating supply. Moving Average shows average price of a security over a specified time period.
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