5 Best Crypto Technical Analysis Indicators You Must Know About
In this section, I’m going to talk about the best technical analysis indicators for crypto!
You cannot overestimate the importance of this subject. Many crypto newcomers think they can learn crypto trading by simply participating in the market, and gathering experience along the way. But the best technical analysis indicators for a trader are like a map for a traveler - they can show you the way.
These indicators can get quite perplexing. Sometimes, the way they’re called is enough to scare eager learners away. But, as always, that’s what I’m here for, to turn “complex” into “simple”.
In this section, we’re going to talk about what are the best technical analysis indicators for crypto, what’s their purpose, and why it’s important to be aware of them. As usual, I’ll explain them one by one, and provide examples from the crypto world. As you’ll see towards the end of the section, these sophisticated terms will no longer look as inaccessible as they may have in the past!
Let’s dive straight into it!
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Moving Average (MA)
So, let’s begin by taking a look at something that’s known as “Moving Average.” It’s a substantial technical analysis indicator that every serious crypto trader is well aware of.
Moving average, or “MA”, is a technical indicator that helps traders spot price trends. Thanks to it, traders can prepare to buy or sell select assets in advance.
The moving average is calculated by adding up the recent prices of a particular asset, and then dividing that figure by the number of time periods in the calculation average.
Here’s what I mean by that. A crypto asset’s price is averaged over a certain time period. Most commonly, these time periods range from 20, 50 or 200 days. For example, a 50-day moving average is calculated by adding up 50 closing prices of a particular coin or token from the last 50 days, and then dividing that number by 50.
Thanks to this indicator, traders can see in what direction the trend is heading.
So, after calculating the result, and portraying it in a visual way, this indicator allows traders to see through short-term price fluctuations, making it easier to understand the possible long-term price direction of an asset. It’s also why MA is considered one of the best technical analysis indicators for crypto.
If the price is consistently above its moving average, it is considered to be in an uptrend, and if it is consistently below, it is considered to be in a downtrend.
Of course, one could only wish that moving averages were the solution to the risks of trading crypto. Other indicators, factors, and circumstances should always be taken into account, as well.
That said, let’s take a look at yet another option for the best technical analysis indicators for crypto.
Relative Strength Index (RSI)
Specifically, “Relative Strength Index”, or “RSI.” It helps traders understand if a cryptocurrency is overbought, meaning it has been bought too much due to the coin’s price drop, or oversold, meaning it’s been sold too much because it increased in price.
Let’s simplify this. The RSI is expressed on a scale from 0 to 100, and is usually measured over a specific time frame, typically 14 days. When its score is above 70, it means the currency is overbought. And if a currency is overbought, it sends a signal that its price may go down in the near future.
Now, when the RSI score is below 30, it’s considered to be oversold. This sends an opposite signal that its price can increase soon.
So, basically, this tool is like a life hack that allows traders to take a sneak peek into the market’s future. Of course, once again, other factors and influences play an important role as well, and RSI should never be used in isolation, since it can result in uninformed trading decisions.
Bollinger Bands
Moving on, let’s take a look at “Bollinger Bands.” Even though the name is very unclear, this technical indicator makes things far clearer for traders.
It’s used to measure the volatility in the price of a particular cryptocurrency. It achieves this by creating a visual representation of how much a crypto asset’s price has drifted away from the average.
Once again, it allows traders to predict whether the coin is being overbought, or oversold. Just like with the “Relative Strength Index,” this allows them to take an informed guess about whether the price is about to go up or down.
Here’s how Bollinger Bands are used in practice. This index is expressed in two bands on a price chart - the upper one, and the lower one.
When the crypto coin’s price rises and reaches (or breaks through) the upper band, it can be read as a signal that a price reversal is on its way - in other words, that it can go down soon. Traders can use this information as a hint that selling their holdings right now could be the right thing to do.
When the price reaches the lower band, it can be understood as a signal to do the exact opposite - to buy the tokens, since their price may increase any day, or any minute, from now.
Ichimoku Cloud
Now, let’s take a look at something that at least sounds less technical. I’m talking about the “Ichimoku Cloud.” This poetic-sounding indicator is a powerful tool in the hands of those who know how to use it correctly.
Similarly to other crypto indicators, the Ichimoku Cloud helps traders identify potential trend reversals, plan their investment actions ahead, and scan the overall market sentiment. It’s called a “cloud,” because it resembles one, when visualized on a price chart.
This cloud is made up of two lines. Line A and Line B. Respectively, they represent the average of the highest high and lowest low of a particular crypto coin over a specific period of time.
Now, once traders take a look at the cloud, they can see what the coin’s price is up to. When the price is above the cloud, traders can interpret it as a bullish signal. Specifically, it sends a signal that the price is up. When the price is below the cloud, traders read it as a bearish signal - there’s a downwards trend.
This helps them understand how the coin is going to perform in the upcoming days, thus informing them about whether it’s the right time to buy or sell.
By the way, if you want to learn more about what “bullish” and “bearish” signals are, you should check out the section dedicated to this topic!
Overall, this indicator is a powerful source of insights for traders. But, just like with any other indicator - it should not be relied upon entirely, since the crypto market is way too versatile and complex.
Fibonacci Retracement
Now, as the cherry on top, let’s address something that sounds the most fun. Everyone’s heard of the Fibonacci Sequence. Found everywhere, from Baroque paintings to memes, this “Fibonacci” has its practical application in crypto, as well. But, in crypto, it’s called the “Fibonacci Retracement.”
It’s a technical analysis tool used by traders to predict an asset's price movement. It is based on the famous Fibonacci sequence, the satisfying mathematical concept in which each number is the sum of the two preceding numbers, and, when expressed visually, becomes recognizable because of its universal application in measuring visual symmetry.
In the context of crypto, Fibonacci retracement is used to identify potential price levels, and their trends.
This is how it’s used in practice. First, a trader has to identify the high and low points of the cryptocurrency's price movement over a fixed period of time. Then, they would draw horizontal lines through these points to create a "retracement grid" on the chart. Having done that, the trader has established the possible price levels that may act as areas of support or resistance for the price.
Now, what are these areas of “support” and “resistance” in crypto?
These concepts are used to identify the potential price levels that may play a key role in changing how the market reacts to a particular coin or token. When an asset reaches a particular price, if it’s low - it’s called the support, if it’s high - it’s called resistance.
When a price reaches its support level, the demand for this asset can get strong, which would stop the asset’s price from falling down further.
When a price reaches its resistance level, traders understand that the cryptocurrency is performing strong enough, and it becomes safer to assume that its price will not continue increasing in the nearest future. So, when traders observe price movements, they follow support and resistance levels to catch signals about new buying and selling opportunities.
In short, the Fibonacci Retracement allows traders to look for a pattern between the support and resistance levels.
For instance, a trader may look at the Fibonacci retracement levels as potential places of support where the price may begin its rebound, and start heading back up. And if a cryptocurrency is in an uptrend, this tool gives a hint about when its price may start declining. It’s yet another smart life-hack that allows traders to try and predict the future of the highly volatile crypto market.
Wrapping Up
There are many lists of the best technical analysis indicators for crypto. In this section, I’ve covered 5 of these tools. Every advanced trader is well aware of them, and employs them on a daily basis.
The debate about which indicator is the best one is dubious. On the one hand, many people have their preferences. On the other hand, it’s safe to say that relying on a single analysis indicator is not only insufficient, but it’s dangerous, stupid even.
The crypto market is in perpetual motion, and it’s impossible to find a solution for all the problems that traders run into every day. Therefore, the best approach is to educate oneself, understand the importance of technical analysis indicators, and find which ones are the best for you.
When optimism and confidence enter the market, investors feel like they can take a risk, and go for something less safe, such as a niche altcoin, or a less-known DeFi project. The main thing is that <strong>the money is coming into the market<\/strong>, and it further fuels the general optimism, and accelerates the bullish mood.<\/p>\n<h2>What Causes a Market to Turn Bullish or Bearish?<\/h2>\n<p>Moving further, it’s time to talk about <strong>what can suddenly trigger a market to change<\/strong>. In order for the entire market to go through a large change, massively important events have to take place.<\/p>\n<p><strong>Economic data plays a crucial role<\/strong> in how the market is going to look in the near future. For example, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-inflation/">inflation rate<\/strong><\/a> is something that traders must not ignore. Whenever inflation is on the rise, it signals that the Central banks may begin implementing harsher monetary policies, such as hiking up the interest rates.<\/p>\n<p>An increase in interest rates means that economic activity is about to decrease, and investors and traders may begin hesitating before investing in more-volatile projects or assets.<\/p>\n<p>Another crucial factor could be <strong>geopolitical events or natural disasters<\/strong>. A war, a terrorist attack, political instability, and similar events definitely add to the volatility and uncertainty in the crypto market. But sometimes, things happen in an unexpected manner.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is bullish and bearish: Market.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-bullish-and-bearish-06.jpg/" alt=\"What is bullish and bearish: Market.\" width=\"1000\" height=\"503\" \/><\/p>\n<p>For example, <strong>when the war in Ukraine broke out<\/strong>, the market’s reaction was ambiguous. Some investors realized that Bitcoin, unlike local currencies, can be regarded as a safe haven, since it’s not affected by national boundaries. Therefore, despite the growing uncertainty, Bitcoin didn’t take a noticeable hit, and the market didn’t dive into a bearish phase.<\/p>\n<p>Finally, I’ve got to mention <strong>the crypto industry itself<\/strong>. Positive updates and news may lead to, or consolidate the bullish sentiment. While negative news, on the other hand, can be detrimental. And if the news comes out from something big and important within the industry, it can cause a domino effect, which could then result in everything turning bearish very quickly.<\/p>\n<p>A recent example could be <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//news//ceo-terraform-suggests-a-plan-to-save-ust-from-mass-destruction/">the collapse of the Terra Luna ecosystem<\/strong><\/a>. In 2022, <a href=https://www.bitdegree.org/"//cryptocurrency-prices//terrausd-ust-price/">UST and <a href=https://www.bitdegree.org/"//cryptocurrency-prices//terra-luna-luna-price/">LUNA, two interconnected coins issued by the same company, suddenly malfunctioned. In the course of 2 days, <strong>the LUNA coin went from $120 to $0.02<\/strong>, thus triggering a massive sell-off, and a wave of panic amongst investors.<\/p>\n<p>It’s estimated that as a direct result of this event, $60 billion evaporated from the crypto space. <strong>It created FUD, and threw the crypto market into its bearish phase<\/strong> that hasn’t yet passed, almost one year after the Terra Luna events.<\/p>\n<h2>Wrapping Up<\/h2>\n<p>Having said that, it’s time to wrap things up! I hope that, by now, you have learned what is “bullish” and “bearish” when it comes to crypto, what are their key differences, and how important it is for every trader to be able to tell them apart!<\/p>\n<p>The topic is, admittedly, rather expansive - <strong>we haven’t even gotten to the technical side of things<\/strong>, such as covering bullish and bearish candles! However, I will not go into more detail about the technical side in this section as there is so much to cover...<\/p>\n<p>Make sure to check out other sections in this <strong>Crypto 101 Handbook<\/strong> to find out more about it, and the crypto world, as a whole!<\/p>","definition":"Did you know that the terms \"bearish\" and \"bullish\" when talking about the crypto or stocks markets essentially originate from the way bears and bulls attack?","status":"published","meta_title":"What is the Difference Between Bullish and Bearish?","meta_description":"You might be asking what is bullish and bearish in crypto? Here, you'll find what these terms mean and why is it called bullish and bearish.","meta_keywords":"what is bullish and bearish, why is it called bullish and bearish, bullish and bearish patterns, difference between bearish and bullish, bullish and bearish candles","modified_content":"<p>In this section, we’re going to talk about <strong>what is bullish and bearish in crypto<\/strong>!<\/p>\n<p>As the <a href=https://www.bitdegree.org/"https:////en.wikipedia.org//wiki//Charging_Bull/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Charging Bull statue on Wall Street<\/strong><\/a> lets the world know, investment is all about that bullish attitude and energy. But as there are two sides to a coin, there are two different sentiments that can encapsulate the overall current state of the market. This, of course, very much applies to the crypto market, as well.<\/p>\n<p>The expressions <em>“bearish”<\/em> and <em>“bullish”<\/em> are essential parts of every trader’s vocabulary. There are many signs and signals that <strong>allow traders to understand what state the market is currently in<\/strong>. But in order to be able to read those signals, a trader must understand the very definitions of these two terms!<\/p>\n<p>In this section, we’re going to talk about what is “Bullish” and “Bearish” in crypto, why is it called “Bullish” and “Bearish,“ in the first place, when are these terms used, and how traders can understand in which condition the cryptocurrency market is, at any given point in time. As always, I’ll provide real-life examples to illustrate my points.<\/p>\n<p><em>Let’s begin!<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"Bullish vs Bearish Markets: How to Predict it? (Animated)\"\n title=\"Bullish vs Bearish Markets: How to Predict it? (Animated)\" class=\"border-0\">\n <p>Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Bearish and Bullish Markets: Do They Matter?<\/h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? 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When traders find themselves in a bear market, this means that the prices are falling, the general mood is pessimistic, and investors hesitate before investing. It all boils down to a common feeling of uncertainty about how the market will perform in the near future.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is bullish and bearish: Bear market.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-bullish-and-bearish-01.jpg/" alt=\"What is bullish and bearish: Bear market.\" width=\"1000\" height=\"572\" \/><\/p>\n<p>When it comes to crypto, a bear market is when the <strong>prices of cryptocurrencies are in continuous decline<\/strong>, new projects struggle to attract investments, and there’s an overall lack of confidence in the whole trading sphere. Or, to put it shortly, it’s when the numbers on charts turn red, and stay that way for way longer than most traders would prefer them to.<\/p>\n<p>Analyzing this from the perspective of bullish and bearish candles, <strong>bearish sentiments would be represented by red candles<\/strong>, as well.<\/p>\n<p>Okay, but on the topic of why is it called bullish and bearish, what does this whole thing have to do with bears? Well, as with many things in crypto, the answer is volatile. <em>It depends on who you are going to ask!<\/em> It’s because there are several explanations about the origins of this term.<\/p>\n<p>Some speculate that it has to do with times when traders would sell bearskins for speculative prices before they even received them from the trappers, thus participating in risky deals. But the most common explanation is that <strong>the term “bear market” derives from the way bears, the animals, attack their prey<\/strong>. They do so by swiping their paws downwards. And when everything in the market is going <em>“downwards,”<\/em> you know you’re in the middle of a bear market.<\/p>\n<p>To illustrate what a bear market looks like in reality, we can take a look at the first months of 2018. It’s the period when the world observed <a href=https://www.bitdegree.org/"//cryptocurrency-prices//bitcoin-btc-price/">Bitcoin’s price<\/strong><\/a> fall from almost $20,000 to below $6,000.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is bullish and bearish: January 2018.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-bullish-and-bearish-02.jpg/" alt=\"What is bullish and bearish: Bitcoin’s price fall from almost $20,000 to below $6,000 on January 2018.\" width=\"1000\" height=\"564\" \/><\/p>\n<p><a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin, being the forepost of the crypto world, reflected the overall sentiment of the market, as the majority of less significant altcoins suffered losses as well, and traders chose not to invest into crypto as they did before.<\/p>\n<h2>What is a “Bull Market”?<\/h2>\n<p>Okay, the next question is what’s the difference between “bearish” and “bullish” patterns?<\/p>\n<p>“Bullish market” or “<a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-bull-market/">bull market<\/strong><\/a>” refer to the exact opposite of “bear market.” <strong>The crypto market is “bullish” when the coin prices increase<\/strong>, the general feeling is joyous and enthusiastic. Investors are optimistic about the future performance of particular projects, products, coins, and the entire crypto market, in general. If the numbers on the charts turn green, and stay that way for an extended period of time, traders know they are in a bull market.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is bullish and bearish: Bull market.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-bullish-and-bearish-03.jpg/" alt=\"What is bullish and bearish: Bull market.\" width=\"1000\" height=\"552\" \/><\/p>\n<p>On the topic of why is it called bullish and bearish, just like with the “bear market,” <strong>the expressions “bull” and “bullish” come from the way a bull charges<\/strong>. When in attack mode, a bull thrusts its horns up into the air, which poetically resembles the upwards trend of the price increase during a prolonged period of time, be it the price of cryptocurrencies, stocks, securities, or other forms of investment.<\/p>\n<p>And, in regards to bullish and bearish candles, <strong>bullish sentiments would be associated with green candlesticks<\/strong>, in the charts.<\/p>\n<p>A good example of a real-life bullish market could be the time before the 2018 bearish market kicked in. It took place in the second half of 2017, and, as mentioned before, it was characterized by the constant rise of Bitcoin’s value.<\/p>\n<p>Eventually, one Bitcoin was worth almost $20,000. The entire industry rejoiced; enthusiasm and optimism were all over the place, as investors were eager to invest in new up-and-coming projects, as well as in the already-established industry giants.<\/p>\n<h2>What Signs Tell Us We’re in a Bear Market?<\/h2>\n<p>Okay, now you know what is bullish and bearish. However, that was the theory. <em>Let’s get practical<\/em>. Let’s talk about what signs traders should look for in order to recognize what the current condition of the current market is, and what are the bullish and bearish patterns that traders should be aware of. First of all, let’s discuss <strong>what signs give away that a market is going through a bear phase<\/strong>.<\/p>\n<p>As mentioned before, <strong>the downwards trend<\/strong> is the essential characteristic of a bearish market. Everything goes down. In other words, you can see a decrease in most of the indicators.<\/p>\n<p>First of all, it’s the decrease in crypto prices. If the majority of the coins continue losing their value, and this doesn’t stop for a long time, it’s clearly an indicator that the market is turning, or already is, bearish.<\/p>\n<p>Another important indicator is <strong>the decrease in overall crypto trading volume<\/strong>. <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-volume/">Trading volume<\/strong><\/a> in crypto refers to the total amount of crypto that’s being traded actively. To put it in simple words, trading volume is a term used to describe all the buying and selling activities that take place during a certain period of time. So, if the trading volume is continuously decreasing, this could very much mean that the bearish market is here.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is bullish and bearish: FUD.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-bullish-and-bearish-04.jpg/" alt=\"What is bullish and bearish: FUD.\" width=\"1000\" height=\"591\" \/><\/p>\n<p>When the prices and trading volume decrease, it naturally leads to a <strong>decrease in overall trading activity<\/strong>. This means that fewer people want to buy or sell their crypto assets. Such characteristics indicate that <strong>FUD (fear, uncertainty, and doubt)<\/strong> are taking over the overall market’s sentiment. If you want to know more about how this emotion affects the crypto market, be sure to check <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-fud/">the section about FUD<\/strong><\/a>!<\/p>\n<p>So, when the prices, trading volume, and trading activity decrease, it all is reflected by a decrease in crypto market capitalization. More commonly referred to as <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-market-capitalization-market-cap-mcap/">market cap<\/strong><\/a>, it’s an index that calculates the size and value of a particular coin, or the entire crypto market, as a whole. Logically, <strong>when everything decreases, the market cap goes down, as well<\/strong>.<\/p>\n<p>A decrease measured by different metrics is then accompanied and consolidated by <strong>negative media content<\/strong>, such as news, columns, or critical comments. The positive sides and developments get overlooked, while the negative ones gain all the attention. This further strengthens the FUD that’s taking over the market, and everyone can feel the bear’s paws gripping the entire industry.<\/p>\n<h2>What Signs Tell Us We’re in a Bull Market?<\/h2>\n<p>Moving on, let’s turn to something more positive - <strong>a bull market<\/strong>. It’s probably not going to come as a surprise that when it comes down to a bullish market, <strong>everything is the exact opposite of a bear market<\/strong>. The main characteristic of a bull market could be summed up in one word: <em>“Increase.”<\/em><\/p>\n<p>Increase in cryptocurrency prices, increase in crypto trading volume, increase in trading activity, and in the overall crypto market capitalization. It’s something that’s quite evident when you’re learning about what is bullish and bearish in crypto, especially.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is bullish and bearish: The feeling of optimism during bull market.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-bullish-and-bearish-05.jpg/" alt=\"What is bullish and bearish: The feeling of optimism during bull market.\" width=\"1000\" height=\"532\" \/><\/p>\n<p><strong>This evokes a feeling of optimism<\/strong>, not only among traders, but investors, as well. If you hear more and more news about various projects receiving funding, this sends a signal that confidence has entered the room. This means that <strong>investors feel safe<\/strong> <strong>enough<\/strong> to choose riskier projects to invest their money into.<\/p>\n<p>In a bear market, investors usually opt for investing in assets that are considered <em>“safe havens”, <\/em>such as gold, government bonds, or, in the context of crypto, <strong><a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin and <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum./n When optimism and confidence enter the market, investors feel like they can take a risk, and go for something less safe, such as a niche altcoin, or a less-known DeFi project. The main thing is that <strong>the money is coming into the market<\/strong>, and it further fuels the general optimism, and accelerates the bullish mood.<\/p>\n<h2>What Causes a Market to Turn Bullish or Bearish?<\/h2>\n<p>Moving further, it’s time to talk about <strong>what can suddenly trigger a market to change<\/strong>. In order for the entire market to go through a large change, massively important events have to take place.<\/p>\n<p><strong>Economic data plays a crucial role<\/strong> in how the market is going to look in the near future. For example, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-inflation/">inflation rate<\/strong><\/a> is something that traders must not ignore. Whenever inflation is on the rise, it signals that the Central banks may begin implementing harsher monetary policies, such as hiking up the interest rates.<\/p>\n<p>An increase in interest rates means that economic activity is about to decrease, and investors and traders may begin hesitating before investing in more-volatile projects or assets.<\/p>\n<p>Another crucial factor could be <strong>geopolitical events or natural disasters<\/strong>. A war, a terrorist attack, political instability, and similar events definitely add to the volatility and uncertainty in the crypto market. But sometimes, things happen in an unexpected manner.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is bullish and bearish: Market.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//what-is-bullish-and-bearish-06.jpg/" alt=\"What is bullish and bearish: Market.\" width=\"1000\" height=\"503\" \/><\/p>\n<p>For example, <strong>when the war in Ukraine broke out<\/strong>, the market’s reaction was ambiguous. Some investors realized that Bitcoin, unlike local currencies, can be regarded as a safe haven, since it’s not affected by national boundaries. Therefore, despite the growing uncertainty, Bitcoin didn’t take a noticeable hit, and the market didn’t dive into a bearish phase.<\/p>\n<p>Finally, I’ve got to mention <strong>the crypto industry itself<\/strong>. Positive updates and news may lead to, or consolidate the bullish sentiment. While negative news, on the other hand, can be detrimental. And if the news comes out from something big and important within the industry, it can cause a domino effect, which could then result in everything turning bearish very quickly.<\/p>\n<p>A recent example could be <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//news//ceo-terraform-suggests-a-plan-to-save-ust-from-mass-destruction/">the collapse of the Terra Luna ecosystem<\/strong><\/a>. In 2022, <a href=https://www.bitdegree.org/"//cryptocurrency-prices//terrausd-ust-price/">UST and <a href=https://www.bitdegree.org/"//cryptocurrency-prices//terra-luna-luna-price/">LUNA, two interconnected coins issued by the same company, suddenly malfunctioned. In the course of 2 days, <strong>the LUNA coin went from $120 to $0.02<\/strong>, thus triggering a massive sell-off, and a wave of panic amongst investors.<\/p>\n<p>It’s estimated that as a direct result of this event, $60 billion evaporated from the crypto space. <strong>It created FUD, and threw the crypto market into its bearish phase<\/strong> that hasn’t yet passed, almost one year after the Terra Luna events.<\/p>\n<h2>Wrapping Up<\/h2>\n<p>Having said that, it’s time to wrap things up! I hope that, by now, you have learned what is “bullish” and “bearish” when it comes to crypto, what are their key differences, and how important it is for every trader to be able to tell them apart!<\/p>\n<p>The topic is, admittedly, rather expansive - <strong>we haven’t even gotten to the technical side of things<\/strong>, such as covering bullish and bearish candles! However, I will not go into more detail about the technical side in this section as there is so much to cover...<\/p>\n<p>Make sure to check out other sections in this <strong>Crypto 101 Handbook<\/strong> to find out more about it, and the crypto world, as a whole!<\/p>","youtube_video":{"id":74,"channel_id":1,"sort":32,"video_title":"Bullish vs Bearish Markets: How to Predict it? (Animated)","description":"What are bearish and bullish markets in crypto?\n\nBullish market (also known as bull market) represents a market that's full of enthusiasm, and optimism. Crypto prices are on the rise, investors are daring, and the whole industry is growing. Bearish market (or bull market) represents the exact opposite. \n\nIn this video, I'll explain what a bullish market in crypto is, as well as what a bear market is. I'll go through what signals let us know about the current state of the market, how to recognize them, and what causes a shift in the market's condition.\n\nHow do you measure in what condition the market is? Are there other data sources or metrics that you follow to stay informed whether the market is bearish or bullish? If you have any suggestions, comments or insights, share them in the comment section below!\n\nVideo Time Table:\n\n0:00 Introduction to What is Bullish vs Bearish Market in Crypto\n1:06 What is a Bear Market?\n2:53 What is a Bull Market?\n4:15 Bear Market Signs\n6:22 Bull Market Signs\n7:29 What Turns the Market to Bullish or Bearish?\n9:28 Wrap-up: Bullish vs Bearish Market in Crypto\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained \n\n#Bullish #Bearish #CryptoWinter","video_id":"MSU-Rj16ZUs","duration":610,"view_count":279,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/bullish-vs-bearish-markets-how-to-predict-it-animated.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-05-30T14:27:26.000000Z","created_at":"2023-05-30T23:00:12.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}}"
:model="{"id":480,"chapter_id":8,"order":2,"featured_image_id":3094,"youtube_video_id":78,"author_id":1,"created_at":"2023-04-28T08:21:00.000000Z","updated_at":"2023-12-28T07:03:16.000000Z","slug":"best-technical-analysis-indicators-for-crypto","title":"5 Best Crypto Technical Analysis Indicators You Must Know About","content":"<p>In this section, I’m going to talk about the <strong>best technical analysis indicators for crypto<\/strong>!<\/p>\n<p>You cannot overestimate the importance of this subject. Many crypto newcomers think they can learn crypto trading by simply participating in the market, and gathering experience along the way. But the best <strong>technical analysis indicators for a trader are like a map for a traveler<\/strong> - they can show you the way.<\/p>\n<p>These indicators can get quite perplexing. Sometimes, the way they’re called is enough to scare eager learners away. But, as always, that’s what I’m here for, to turn “<em>complex<\/em>” into “<em>simple<\/em>”.<\/p>\n<p>In this section, we’re going to talk about <strong>what are the best technical analysis indicators for crypto<\/strong>, what’s their purpose, and why it’s important to be aware of them. As usual, I’ll explain them one by one, and provide examples from the crypto world. As you’ll see towards the end of the section, these sophisticated terms will no longer look as inaccessible as they may have in the past!<\/p>\n<p><em>Let’s dive straight into it!<\/em><\/p>\n<h2>Moving Average (MA)<\/h2>\n<p>So, let’s begin by taking a look at something that’s known as “<strong>Moving Average<\/strong>.” It’s a substantial technical analysis indicator that every serious crypto trader is well aware of.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Moving Average (MA).\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-01.jpg/" alt=\"Best technical analysis indicators for crypto: Moving Average (MA).\" width=\"1000\" height=\"588\" \/><\/p>\n<p>Moving average, or “MA”, is a technical indicator that <strong>helps traders spot price trends<\/strong>. Thanks to it, traders can prepare to buy or sell select assets in advance.<\/p>\n<p>The moving average is calculated by adding up the recent prices of a particular asset, and then dividing that figure by the number of time periods in the calculation average.<\/p>\n<p>Here’s what I mean by that. <strong>A crypto asset’s price is averaged over a certain time period<\/strong>. Most commonly, these time periods range from 20, 50 or 200 days. For example, a 50-day moving average is calculated by adding up 50 closing prices of a particular coin or token from the last 50 days, and then dividing that number by 50.<\/p>\n<p>Thanks to this indicator, traders can see in <strong>what direction the trend is heading<\/strong>.<\/p>\n<p>So, after calculating the result, and portraying it in a visual way, this indicator allows traders to <strong>see through short-term price fluctuations<\/strong>, making it easier to understand the possible long-term price direction of an asset. It’s also why MA is considered one of the best technical analysis indicators for crypto.<\/p>\n<p>If the price is consistently above its moving average, it is considered to be in an uptrend, and if it is consistently below, it is considered to be in a downtrend.<\/p>\n<p>Of course, one could only wish that moving averages were the solution to the risks of trading crypto. <strong>Other indicators, factors, and circumstances should always be taken into account, as well<\/strong>.<\/p>\n<p>That said, let’s take a look at yet another option for the best technical analysis indicators for crypto.<\/p>\n<h2>Relative Strength Index (RSI)<\/h2>\n<p>Specifically, “<strong>Relative Strength Index<\/strong>”, or “RSI.” It helps traders <strong>understand if a cryptocurrency is overbought<\/strong>, meaning it has been bought too much due to the coin’s price drop, or oversold, meaning it’s been sold too much because it increased in price.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Relative Strength Index (RSI).\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-02.jpg/" alt=\"Best technical analysis indicators for crypto: Relative Strength Index (RSI).\" width=\"1000\" height=\"515\" \/><\/p>\n<p>Let’s simplify this. The RSI is expressed on a <strong>scale from 0 to 100<\/strong>, and is usually measured over a specific time frame, typically 14 days. When its score is <strong>above 70<\/strong>, it means the currency is <strong>overbought<\/strong>. And if a currency is overbought, it sends a signal that its price may go down in the near future.<\/p>\n<p>Now, when the RSI score is <strong>below 30<\/strong>, it’s considered to be <strong>oversold<\/strong>. This sends an opposite signal that its price can increase soon.<\/p>\n<p>So, basically, this tool is like a life hack that allows traders to <strong>take a sneak peek into the market’s future<\/strong>. Of course, once again, other factors and influences play an important role as well, and RSI should never be used in isolation, since it can result in uninformed trading decisions.<\/p>\n<h2>Bollinger Bands<\/h2>\n<p>Moving on, let’s take a look at “<strong>Bollinger Bands<\/strong>.” Even though the name is very unclear, this technical indicator makes things far clearer for traders.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Bollinger Bands.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-03.jpg/" alt=\"Best technical analysis indicators for crypto: Bollinger Bands.\" width=\"1000\" height=\"573\" \/><\/p>\n<p>It’s used to <strong>measure the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-volatility/">volatility in the price of a particular cryptocurrency<\/strong>. It achieves this by creating a visual representation of how much a crypto asset’s price has drifted away from the average.<\/p>\n<p>Once again, it allows traders to <strong>predict whether the coin is being overbought, or oversold<\/strong>. Just like with the “Relative Strength Index,” this allows them to take an informed guess about whether the price is about to go up or down.<\/p>\n<p>Here’s how Bollinger Bands are used in practice. This index is expressed in two bands on a price chart - the upper one, and the lower one.<\/p>\n<p>When the crypto coin’s price <strong>rises and reaches (or breaks through) the upper band<\/strong>, it can be read as a signal that a <strong>price reversal<\/strong> is on its way - in other words, that it can go down soon. Traders can use this information as a hint that selling their holdings right now could be the right thing to do.<\/p>\n<p>When the <strong>price reaches the lower band<\/strong>, it can be understood as a signal to do the exact opposite - to buy the tokens, since <strong>their price may increase any day<\/strong>, or any minute, from now.<\/p>\n<h2>Ichimoku Cloud<\/h2>\n<p>Now, let’s take a look at something that at least sounds less technical. I’m talking about the “<strong>Ichimoku Cloud<\/strong>.” This poetic-sounding indicator is a powerful tool in the hands of those who know how to use it correctly.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Ichimoku Cloud.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-04.jpg/" alt=\"Best technical analysis indicators for crypto: Ichimoku Cloud.\" width=\"1000\" height=\"539\" \/><\/p>\n<p>Similarly to other crypto indicators, the Ichimoku Cloud <strong>helps traders identify potential trend reversals<\/strong>, plan their investment actions ahead, and scan the overall market sentiment. It’s called a “<em>cloud<\/em>,” because it resembles one, when visualized on a price chart.<\/p>\n<p>This cloud is <strong>made up of two lines<\/strong>. Line A and Line B. Respectively, they represent the average of the highest high and lowest low of a particular crypto coin over a specific period of time.<\/p>\n<p>Now, once traders take a look at the cloud, they can see what the coin’s price is up to. When <strong>the price is above the cloud<\/strong>, traders can interpret it as a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-bull-market/">bullish signal<\/strong><\/a>. Specifically, it sends a signal that the price is up. When <strong>the price is below the cloud<\/strong>, traders read it as a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-bear-market/">bearish signal<\/strong><\/a> - there’s a downwards trend.<\/p>\n<p>This helps them understand how the coin is going to perform in the upcoming days, thus informing them about whether it’s the right time to buy or sell.<\/p>\n<p>By the way, if you want to learn more about <strong>what “bullish” and “bearish” signals are<\/strong>, you should check out <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-bullish-and-bearish/">the section<\/strong><\/a> dedicated to this topic!<\/p>\n<p>Overall, this indicator is a powerful source of insights for traders. But, just like with any other indicator - it should not be relied upon entirely, since the crypto market is way too versatile and complex.<\/p>\n<h2>Fibonacci Retracement<\/h2>\n<p>Now, as the cherry on top, let’s address something that sounds the most fun. Everyone’s heard of the <strong>Fibonacci Sequence<\/strong>. Found everywhere, from Baroque paintings to memes, this “<em>Fibonacci<\/em>” has its practical application in crypto, as well. But, in crypto, it’s called the “<strong>Fibonacci Retracement<\/strong>.”<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Fibonacci Retracement.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-05.jpg/" alt=\"Best technical analysis indicators for crypto: Fibonacci Retracement.\" width=\"1000\" height=\"550\" \/><\/p>\n<p>It’s a technical analysis tool used by traders to <strong>predict an asset's price movement<\/strong>. It is based on the famous Fibonacci sequence, the satisfying mathematical concept in which each number is the sum of the two preceding numbers, and, when expressed visually, becomes recognizable because of its universal application in measuring visual symmetry.<\/p>\n<p>In the context of crypto, Fibonacci retracement is used to <strong>identify potential price levels, and their trends<\/strong>.<\/p>\n<p>This is how it’s used in practice. First, a trader has to <strong>identify the high and low points<\/strong> of the cryptocurrency's price movement over a fixed period of time. Then, they would <strong>draw horizontal lines<\/strong> through these points to create a \"<strong>retracement grid<\/strong>\" on the chart. Having done that, the trader has established the possible price levels that may act as areas of support or resistance for the price.<\/p>\n<p>Now, what are these areas of “<em>support<\/em>” and “<em>resistance<\/em>” in crypto?<\/p>\n<p>These concepts are used to identify the potential price levels that may play a key role in changing how the market reacts to a particular <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//tutorials//token-vs-coin/">coin or token<\/strong><\/a>. When an asset reaches a particular price, if it’s low - it’s called the <strong>support<\/strong>, if it’s high - it’s called <strong>resistance<\/strong>.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Support and Resistance.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-06.jpg/" alt=\"Best technical analysis indicators for crypto: Support and Resistance.\" width=\"1000\" height=\"610\" \/><\/p>\n<p>When a price reaches its support level, <strong>the demand for this asset can get strong<\/strong>, which would stop the asset’s price from falling down further.<\/p>\n<p>When a price reaches its resistance level, traders understand that <strong>the cryptocurrency is performing strong enough<\/strong>, and it becomes safer to assume that its price will not continue increasing in the nearest future. So, when traders observe price movements, they follow support and resistance levels to catch signals about new buying and selling opportunities.<\/p>\n<p>In short, the Fibonacci Retracement allows traders to <strong>look for a pattern between the support and resistance levels<\/strong>.<\/p>\n<p>For instance, a trader may look at the Fibonacci retracement levels as <strong>potential places of support<\/strong> where the price may begin its rebound, and start heading back up. And if a cryptocurrency is in an uptrend, this tool gives a hint about <strong>when its price may start declining<\/strong>. It’s yet another smart life-hack that allows traders to try and predict the future of the highly volatile crypto market.<\/p>\n<h2>Wrapping Up<\/h2>\n<p>There are many lists of the best technical analysis indicators for crypto. In this section, <strong>I’ve covered 5 of these tools<\/strong>. Every advanced trader is well aware of them, and employs them on a daily basis.<\/p>\n<p>The debate about which indicator is the best one is dubious. On the one hand, many people have their preferences. On the other hand, it’s safe to say that <strong>relying on a single analysis indicator is not only insufficient, but it’s dangerous, stupid even<\/strong>.<\/p>\n<p>The crypto market is in perpetual motion, and it’s impossible to find a solution for all the problems that traders run into every day. Therefore, the best approach is to educate oneself, understand the importance of technical analysis indicators, and find which ones are the best for you.<\/p>","definition":"Did you know that the Fibonacci Retracement technical analysis indicator is based on the famous Fibonacci sequence?","status":"published","meta_title":"Top 5 Best Technical Analysis Indicators for Crypto","meta_description":"What are the best technical analysis indicators for crypto you should know about? Find out here to improve your crypto market predictions!","meta_keywords":"best technical analysis indicators for crypto","modified_content":"<p>In this section, I’m going to talk about the <strong>best technical analysis indicators for crypto<\/strong>!<\/p>\n<p>You cannot overestimate the importance of this subject. Many crypto newcomers think they can learn crypto trading by simply participating in the market, and gathering experience along the way. But the best <strong>technical analysis indicators for a trader are like a map for a traveler<\/strong> - they can show you the way.<\/p>\n<p>These indicators can get quite perplexing. Sometimes, the way they’re called is enough to scare eager learners away. But, as always, that’s what I’m here for, to turn “<em>complex<\/em>” into “<em>simple<\/em>”.<\/p>\n<p>In this section, we’re going to talk about <strong>what are the best technical analysis indicators for crypto<\/strong>, what’s their purpose, and why it’s important to be aware of them. As usual, I’ll explain them one by one, and provide examples from the crypto world. As you’ll see towards the end of the section, these sophisticated terms will no longer look as inaccessible as they may have in the past!<\/p>\n<p><em>Let’s dive straight into it!<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"Best Crypto Analysis Indicators Explained (Beginner-Friendly Animation)\"\n title=\"Best Crypto Analysis Indicators Explained (Beginner-Friendly Animation)\" class=\"border-0\">\n <p>Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: 5 Best Crypto Technical Analysis Indicators You Must Know About<\/h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"5 Best Crypto Technical Analysis Indicators You Must Know About\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"mFyk-zUmWQY\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n <p class=\"text-left dyk-video-title\">Best Crypto Analysis Indicators Explained (Beginner-Friendly Animation)<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/best-crypto-analysis-indicators-explained-beginner-friendly-animation.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/best-crypto-analysis-indicators-explained-beginner-friendly-animation.jpg?tr=w-760 1000w\"\n alt=\"Best Crypto Analysis Indicators Explained (Beginner-Friendly Animation)\"\n title=\"Best Crypto Analysis Indicators Explained (Beginner-Friendly Animation)\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"Best Crypto Analysis Indicators Explained (Beginner-Friendly Animation)\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"><\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n <span>ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"><\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n <span>New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>Moving Average (MA)<\/h2>\n<p>So, let’s begin by taking a look at something that’s known as “<strong>Moving Average<\/strong>.” It’s a substantial technical analysis indicator that every serious crypto trader is well aware of.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Moving Average (MA).\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-01.jpg/" alt=\"Best technical analysis indicators for crypto: Moving Average (MA).\" width=\"1000\" height=\"588\" \/><\/p>\n<p>Moving average, or “MA”, is a technical indicator that <strong>helps traders spot price trends<\/strong>. Thanks to it, traders can prepare to buy or sell select assets in advance.<\/p>\n<p>The moving average is calculated by adding up the recent prices of a particular asset, and then dividing that figure by the number of time periods in the calculation average.<\/p>\n<p>Here’s what I mean by that. <strong>A crypto asset’s price is averaged over a certain time period<\/strong>. Most commonly, these time periods range from 20, 50 or 200 days. For example, a 50-day moving average is calculated by adding up 50 closing prices of a particular coin or token from the last 50 days, and then dividing that number by 50.<\/p>\n<p>Thanks to this indicator, traders can see in <strong>what direction the trend is heading<\/strong>.<\/p>\n<p>So, after calculating the result, and portraying it in a visual way, this indicator allows traders to <strong>see through short-term price fluctuations<\/strong>, making it easier to understand the possible long-term price direction of an asset. It’s also why MA is considered one of the best technical analysis indicators for crypto.<\/p>\n<p>If the price is consistently above its moving average, it is considered to be in an uptrend, and if it is consistently below, it is considered to be in a downtrend.<\/p>\n<p>Of course, one could only wish that moving averages were the solution to the risks of trading crypto. <strong>Other indicators, factors, and circumstances should always be taken into account, as well<\/strong>.<\/p>\n<p>That said, let’s take a look at yet another option for the best technical analysis indicators for crypto.<\/p>\n<h2>Relative Strength Index (RSI)<\/h2>\n<p>Specifically, “<strong>Relative Strength Index<\/strong>”, or “RSI.” It helps traders <strong>understand if a cryptocurrency is overbought<\/strong>, meaning it has been bought too much due to the coin’s price drop, or oversold, meaning it’s been sold too much because it increased in price.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Relative Strength Index (RSI).\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-02.jpg/" alt=\"Best technical analysis indicators for crypto: Relative Strength Index (RSI).\" width=\"1000\" height=\"515\" \/><\/p>\n<p>Let’s simplify this. The RSI is expressed on a <strong>scale from 0 to 100<\/strong>, and is usually measured over a specific time frame, typically 14 days. When its score is <strong>above 70<\/strong>, it means the currency is <strong>overbought<\/strong>. And if a currency is overbought, it sends a signal that its price may go down in the near future.<\/p>\n<p>Now, when the RSI score is <strong>below 30<\/strong>, it’s considered to be <strong>oversold<\/strong>. This sends an opposite signal that its price can increase soon.<\/p>\n<p>So, basically, this tool is like a life hack that allows traders to <strong>take a sneak peek into the market’s future<\/strong>. Of course, once again, other factors and influences play an important role as well, and RSI should never be used in isolation, since it can result in uninformed trading decisions.<\/p>\n<h2>Bollinger Bands<\/h2>\n<p>Moving on, let’s take a look at “<strong>Bollinger Bands<\/strong>.” Even though the name is very unclear, this technical indicator makes things far clearer for traders.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Bollinger Bands.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-03.jpg/" alt=\"Best technical analysis indicators for crypto: Bollinger Bands.\" width=\"1000\" height=\"573\" \/><\/p>\n<p>It’s used to <strong>measure the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-volatility/">volatility in the price of a particular cryptocurrency<\/strong>. It achieves this by creating a visual representation of how much a crypto asset’s price has drifted away from the average.<\/p>\n<p>Once again, it allows traders to <strong>predict whether the coin is being overbought, or oversold<\/strong>. Just like with the “Relative Strength Index,” this allows them to take an informed guess about whether the price is about to go up or down.<\/p>\n<p>Here’s how Bollinger Bands are used in practice. This index is expressed in two bands on a price chart - the upper one, and the lower one.<\/p>\n<p>When the crypto coin’s price <strong>rises and reaches (or breaks through) the upper band<\/strong>, it can be read as a signal that a <strong>price reversal<\/strong> is on its way - in other words, that it can go down soon. Traders can use this information as a hint that selling their holdings right now could be the right thing to do.<\/p>\n<p>When the <strong>price reaches the lower band<\/strong>, it can be understood as a signal to do the exact opposite - to buy the tokens, since <strong>their price may increase any day<\/strong>, or any minute, from now.<\/p>\n<h2>Ichimoku Cloud<\/h2>\n<p>Now, let’s take a look at something that at least sounds less technical. I’m talking about the “<strong>Ichimoku Cloud<\/strong>.” This poetic-sounding indicator is a powerful tool in the hands of those who know how to use it correctly.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Ichimoku Cloud.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-04.jpg/" alt=\"Best technical analysis indicators for crypto: Ichimoku Cloud.\" width=\"1000\" height=\"539\" \/><\/p>\n<p>Similarly to other crypto indicators, the Ichimoku Cloud <strong>helps traders identify potential trend reversals<\/strong>, plan their investment actions ahead, and scan the overall market sentiment. It’s called a “<em>cloud<\/em>,” because it resembles one, when visualized on a price chart.<\/p>\n<p>This cloud is <strong>made up of two lines<\/strong>. Line A and Line B. Respectively, they represent the average of the highest high and lowest low of a particular crypto coin over a specific period of time.<\/p>\n<p>Now, once traders take a look at the cloud, they can see what the coin’s price is up to. When <strong>the price is above the cloud<\/strong>, traders can interpret it as a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-bull-market/">bullish signal<\/strong><\/a>. Specifically, it sends a signal that the price is up. When <strong>the price is below the cloud<\/strong>, traders read it as a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-bear-market/">bearish signal<\/strong><\/a> - there’s a downwards trend.<\/p>\n<p>This helps them understand how the coin is going to perform in the upcoming days, thus informing them about whether it’s the right time to buy or sell.<\/p>\n<p>By the way, if you want to learn more about <strong>what “bullish” and “bearish” signals are<\/strong>, you should check out <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-bullish-and-bearish/">the section<\/strong><\/a> dedicated to this topic!<\/p>\n<p>Overall, this indicator is a powerful source of insights for traders. But, just like with any other indicator - it should not be relied upon entirely, since the crypto market is way too versatile and complex.<\/p>\n<h2>Fibonacci Retracement<\/h2>\n<p>Now, as the cherry on top, let’s address something that sounds the most fun. Everyone’s heard of the <strong>Fibonacci Sequence<\/strong>. Found everywhere, from Baroque paintings to memes, this “<em>Fibonacci<\/em>” has its practical application in crypto, as well. But, in crypto, it’s called the “<strong>Fibonacci Retracement<\/strong>.”<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Fibonacci Retracement.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-05.jpg/" alt=\"Best technical analysis indicators for crypto: Fibonacci Retracement.\" width=\"1000\" height=\"550\" \/><\/p>\n<p>It’s a technical analysis tool used by traders to <strong>predict an asset's price movement<\/strong>. It is based on the famous Fibonacci sequence, the satisfying mathematical concept in which each number is the sum of the two preceding numbers, and, when expressed visually, becomes recognizable because of its universal application in measuring visual symmetry.<\/p>\n<p>In the context of crypto, Fibonacci retracement is used to <strong>identify potential price levels, and their trends<\/strong>.<\/p>\n<p>This is how it’s used in practice. First, a trader has to <strong>identify the high and low points<\/strong> of the cryptocurrency's price movement over a fixed period of time. Then, they would <strong>draw horizontal lines<\/strong> through these points to create a \"<strong>retracement grid<\/strong>\" on the chart. Having done that, the trader has established the possible price levels that may act as areas of support or resistance for the price.<\/p>\n<p>Now, what are these areas of “<em>support<\/em>” and “<em>resistance<\/em>” in crypto?<\/p>\n<p>These concepts are used to identify the potential price levels that may play a key role in changing how the market reacts to a particular <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//tutorials//token-vs-coin/">coin or token<\/strong><\/a>. When an asset reaches a particular price, if it’s low - it’s called the <strong>support<\/strong>, if it’s high - it’s called <strong>resistance<\/strong>.<\/p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Best technical analysis indicators for crypto: Support and Resistance.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//storage//optimized//best-technical-analysis-indicators-for-crypto-06.jpg/" alt=\"Best technical analysis indicators for crypto: Support and Resistance.\" width=\"1000\" height=\"610\" \/><\/p>\n<p>When a price reaches its support level, <strong>the demand for this asset can get strong<\/strong>, which would stop the asset’s price from falling down further.<\/p>\n<p>When a price reaches its resistance level, traders understand that <strong>the cryptocurrency is performing strong enough<\/strong>, and it becomes safer to assume that its price will not continue increasing in the nearest future. So, when traders observe price movements, they follow support and resistance levels to catch signals about new buying and selling opportunities.<\/p>\n<p>In short, the Fibonacci Retracement allows traders to <strong>look for a pattern between the support and resistance levels<\/strong>.<\/p>\n<p>For instance, a trader may look at the Fibonacci retracement levels as <strong>potential places of support<\/strong> where the price may begin its rebound, and start heading back up. And if a cryptocurrency is in an uptrend, this tool gives a hint about <strong>when its price may start declining<\/strong>. It’s yet another smart life-hack that allows traders to try and predict the future of the highly volatile crypto market.<\/p>\n<h2>Wrapping Up<\/h2>\n<p>There are many lists of the best technical analysis indicators for crypto. In this section, <strong>I’ve covered 5 of these tools<\/strong>. Every advanced trader is well aware of them, and employs them on a daily basis.<\/p>\n<p>The debate about which indicator is the best one is dubious. On the one hand, many people have their preferences. On the other hand, it’s safe to say that <strong>relying on a single analysis indicator is not only insufficient, but it’s dangerous, stupid even<\/strong>.<\/p>\n<p>The crypto market is in perpetual motion, and it’s impossible to find a solution for all the problems that traders run into every day. Therefore, the best approach is to educate oneself, understand the importance of technical analysis indicators, and find which ones are the best for you.<\/p>","youtube_video":{"id":78,"channel_id":1,"sort":31,"video_title":"Best Crypto Analysis Indicators Explained (Beginner-Friendly Animation)","description":"What are the best technical analysis indicators for crypto?\n\nMoving Average (MA), Relative Strength Index (RSI), Bollinger Bands, Ichimoku Cloud\u2026 You name it! All these scary-sounding indexes are something that every serious trader has to be aware of!\n\nIn this video, I'll explain what are the best technical analysis indicators for crypto, what\u2019s their purpose and how useful they are in everyday trading. They range from simple to complex, so no matter your level of experience, you\u2019ll still be able to find something useful in this video! \n\nWhat\u2019s your favorite technical analysis indicator? Do you think there are others that are of essential importance and require coverage and introduction? If you have any ideas, suggestions, comments or insights, share them in the comment section below!\n\nVideo Time Table:\n\n0:00 Introduction to Best Crypto Analysis Indicators\n1:04 Moving Average (MA)\n2:35 Relative Strength Index (RSI)\n3:29 Bollinger Bands\n4:39 Ichimoku Cloud\n5:56 Fibonacci Retracement\n8:05 Wrap-up: Best Crypto Analysis Indicators Explained\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained \n\n#CryptoAnalysis #CryptoTrading #CryptoSignals","video_id":"mFyk-zUmWQY","duration":555,"view_count":192,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/best-crypto-analysis-indicators-explained-beginner-friendly-animation.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-06-02T14:53:29.000000Z","created_at":"2023-06-02T23:00:11.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}},"featured_image":{"id":3094,"uuid":"06efacfd-d1e5-4341-b640-e3911dfe1525","name":"best-technical-analysis-indicators-for-crypto-featured-image.jpg","url":"https:\/\/assets.bitdegree.org\/crypto\/storage\/optimized\/best-technical-analysis-indicators-for-crypto-featured-image.jpg","path":"crypto\/storage\/optimized\/best-technical-analysis-indicators-for-crypto-featured-image.jpg","mime_type":"image\/jpeg","disk":"digitalOceanSpaces","size":94992,"width":1024,"height":576,"custom_properties":null,"created_at":"2023-06-19T06:58:40.000000Z","updated_at":"2023-06-19T06:58:40.000000Z"}}"
:chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? The Pros & Cons","status":"published","modified_content":null},{"chapter_id":2,"order":4,"slug":"coin-vs-token","title":"Coin VS Token: How Do They Differ?","status":"published","modified_content":null},{"chapter_id":2,"order":5,"slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","status":"published","modified_content":null},{"chapter_id":2,"order":6,"slug":"what-is-a-bitcoin","title":"Bitcoin: the Pioneer of the Crypto World","status":"published","modified_content":null},{"chapter_id":2,"order":7,"slug":"what-is-ethereum","title":"The Ultimate Blockchain for dApp Creation: Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":8,"slug":"what-is-cardano-in-crypto","title":"What is Cardano and What is It Used For?","status":"published","modified_content":null},{"chapter_id":2,"order":9,"slug":"what-is-shiba-inu-coin","title":"Shiba Inu: the Dogecoin Killer","status":"published","modified_content":null},{"chapter_id":2,"order":10,"slug":"what-is-solana-in-crypto","title":"Is Solana an Improved Version of Ethereum?","status":"published","modified_content":null},{"chapter_id":2,"order":11,"slug":"what-is-polkadot-in-crypto","title":"The Bridge Between Blockchains: Polkadot","status":"published","modified_content":null},{"chapter_id":2,"order":12,"slug":"what-is-polygon-in-crypto","title":"Polygon: the Essential Scaling Solution for Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":13,"slug":"what-is-luna-crypto","title":"The Bumpy Road of Terra (LUNA)","status":"published","modified_content":null},{"chapter_id":2,"order":14,"slug":"what-is-fantom-crypto","title":"Is Fantom (FTM) Yet Another Ethereum Killer?","status":"published","modified_content":null},{"chapter_id":2,"order":15,"slug":"what-is-aave-crypto","title":"Aave: Crypto Lending Trailblazer","status":"published","modified_content":null},{"chapter_id":2,"order":16,"slug":"what-is-algorand-crypto","title":"Did Algorand Truly Solve the Blockchain Trilemma?","status":"published","modified_content":null},{"chapter_id":2,"order":17,"slug":"what-is-olympus-dao","title":"Does Olympus DAO Have Anything to Do With Mythology?","status":"published","modified_content":null},{"chapter_id":2,"order":18,"slug":"what-is-avax","title":"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?","status":"published","modified_content":null},{"chapter_id":2,"order":19,"slug":"what-is-monero-coin","title":"Monero: Where Cryptocurrency Meets Cryptography","status":"published","modified_content":null},{"chapter_id":2,"order":20,"slug":"what-is-ripple-xrp","title":"Is Ripple \"it\" When it Comes to Cross-Border Transactions?","status":"published","modified_content":null},{"chapter_id":2,"order":21,"slug":"practical-use-of-cryptocurrencies","title":"The Practical Use of Crypto","status":"published","modified_content":null}]},{"id":3,"title":"Crypto Exchanges","slug":"crypto-exchanges","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-exchanges.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-exchanges-101.jpg","rating":80,"sections":[{"chapter_id":3,"order":1,"slug":"how-do-cryptocurrency-exchanges-work","title":"How do Cryptocurrency Exchanges Work?","status":"published","modified_content":null},{"chapter_id":3,"order":2,"slug":"dex-vs-cex","title":"DEX VS CEX: Two Sides of the Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":3,"order":3,"slug":"crypto-day-trading","title":"Crypto Day Trading: The Difference Between Buying, Trading, and Swapping","status":"published","modified_content":null},{"chapter_id":3,"order":4,"slug":"kyc-crypto","title":"KYC & AML: The Key to Complying With Legal Industry Standards","status":"published","modified_content":null},{"chapter_id":3,"order":5,"slug":"how-to-buy-crypto","title":"From Fiat to Crypto: How to Buy Crypto for the First Time","status":"published","modified_content":null},{"chapter_id":3,"order":6,"slug":"fiat-to-crypto","title":"Taking Profits: Turning Crypto Into Fiat","status":"published","modified_content":null},{"chapter_id":3,"order":7,"slug":"how-to-use-crypto","title":"You\u2019ve Got Crypto: What Can You Do With It?","status":"published","modified_content":null}]},{"id":4,"title":"Crypto Wallets","slug":"crypto-wallets","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-wallets.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-wallets-101.jpg","rating":80,"sections":[{"chapter_id":4,"order":1,"slug":"what-is-a-crypto-wallet","title":"What is a Crypto 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current-chapter="crypto-analysis"
current-section="best-technical-analysis-indicators-for-crypto">